Tuesday, July 25, 2006

The director-general of the World Trade Organisation (WTO), Pascal Lamy, suspended negotiations in the Doha round of trade talks on Monday, after a meeting of six “core” negotiators India, Brazil, the United States, European Union, Japan, and Australia in Geneva failed to make any headway in reconciling differences over agricultural trade liberalisation. The US wanted cuts in import tariffs for farm products, which were rejected by EU, Japan and India, who asked for cuts in agricultural subsidies.

Peter Mandelson, the EU trade commissioner, told the Financial Times: “If the US continues to demand dollar-for-dollar compensation in market access [cutting tariffs] for reducing domestic support, no one in the developing world will ever buy that and the EU will not either.” Brazil also identified the US stand on subsidies as the reason the talks failed.

Susan Schwab, the US trade representative, said that the other countries sought exemptions from tariff cuts for a wide range of goods and that such exemptions would defeat the object of the talks – to expand trade. “As we went through the layers of loopholes . . . we discovered that a couple of our trading partners were more interested in loopholes than market access,” she said.

The Indian Commerce and Industries Minister, Kamal Nath said that developing countries could not allow their subsistence farmers to lose their livelihood and food security to provide market access to agricultural products from developed countries.