The Independant
By John Lichfield
Wednesday, 30 July 2008
Nine days – and seven years – of painful negotiations to boost the world
economy by bulldozing obstacles to free trade have collapsed in Geneva.
Hopes of a confidence-building breakthrough on trade in food, industrial
goods and financial services between rich, poor and developing nations
foundered on a dispute between China, India and the US. Although there
was some talk of fresh negotiations in September, the so-called "Doha"
round of trade talks, launched in 2001, appeared to be dead in the
water.
The talks broke down after the US failed to resolve a dispute with China
and India over a proposed system to defend poor farmers in developing
nations from a surge of food exports from richer countries. The issue –
regarded as minor when the talks began – came to crystallise growing
suspicions between rich and poor, the developed and the developing,
about the balance of risks and benefits in the package.
The failure was greeted with relief by some – and with intense alarm by
others. With the world economy wounded by high oil prices and the
banking crisis, there were fears that the collapse of the talks could
undermine business confidence and tip the world towards recession. "It
was hanging on a thread," said the Brazilian Foreign Minister Celso
Amorim. The thread didn't hold."
Peter Power, spokesman for the EU trade commissioner Peter Mandelson,
said the failure was a "massive blow to confidence in the global
economy". In a blog written before the final collapse, Mr Mandelson
spoke of his "disbelief" that such important negotiations could be
torpedoed by what he saw as a relatively technical dispute.
Similar views were expressed in the US and Europe. "I think it's a
strong negative and it really follows on the heels of a retreat from
globalisation and trade that were really the building blocks for the
prosperity of the last several decades," said Michael Darda, chief
economist at MKM Partners in the US.
Third World aid pressure groups said the collapse signalled a
willingness by poorer countries to stand up to the West. "No deal is
better than a bad deal," said Matthew Coghlan, of Christian Aid.
The much-anticipated showdown between Mr Mandelson and the French
President Nicolas Sarkozy was not the principal cause of the collapse.
Some officials suggested last night that the immediate main sticking
point was a row between Washington, Delhi and Beijing.
India joined with China in demanding a toughly worded "special safeguard
mechanism" to allow developing nations to protect poor, peasant farmers.
The US negotiator Susan Schwab objected to wording which, she claimed,
would allow poorer nations to protect their agricultural markets
unfairly. Some officials pointed to breakthroughs on issues which had
destroyed negotiations in in 2003 and 2005. They spoke of a fresh
attempt to revive the Doha round in the autumn.
However, Phil Goff, the New Zealand Trade Minister, said that the US
elections would, in effect, freeze negotiations for at least 12 months.
He said that it would probably be for a "new generation" to resume the
talks.
The EU and US had agreed, in principle, to open up their farm markets to
produce from Latin America, Asia and Africa. Brazil, China, India and
other developing nations had agreed to accept more manufactured goods
and financial services from the wealthy world. Some European
governments, and pressure groups, said the EU conceded too much. All of
these concessions are now suspended.
http://www.independent.co.uk/news/world/politics/trade-talks-fail-over-
us-farm-feud-880309.html
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