Curtains for Doha round as world trades charges

G6 fails to overcome differences on reforming farm trade.

The Doha round of trade talks at the WTO were suspended on Monday, with trade ministers of G-6 countries failing to arrive at a consensus following the United States' refusal to offer more cuts in farm subsidies.

"The trade talks have been suspended. We cannot agree to the perpetuation of the structural flaws in global trade," Commerce and Industry Minister Kamal Nath told Business Standard from Geneva.

Nath said he would continue to talk to other developing countries, but added that no fresh time-lines had been set.

With this, the possibility of finalising within the year the modalities for tariff cuts in agriculture and industrial goods now appears remote. The European Union openly blamed the US for the failure of the talks.

EU Trade Commissioner Peter Mandelson said: "There is no more time left. The United States was unwilling to accept, or indeed to acknowledge, the flexibility being shown by others..and, as a result, felt unable to show any flexibility on the issue of farm subsidies."

Addressing the WTO Trade Negotiations Committee at Geneva, Nath said: "The developments at the G-6 meeting (on Sunday) have highlighted what has been clear to many for quite some time "" that as of now there is little ground for convergence on the core issues in the Doha Round negotiations."

A trade negotiator who participated in the talks said the failure to arrive at an agreement was mainly due to the United States' refusal to offer any further cuts in the domestic support that it gave its farmers.

America is wanting to bind its farmer subsidy at over $22 billion, up from the present subsidy level of $19 billion, a proposal which has not found favour with other WTO members.

Though the European Union offered more concessions on market access during the 14-hour marathon meeting on Sunday, the talks could not be salvaged due to the US' reluctance to move further.

The EU had on Sunday offered to cut its farm tariffs by 51.5 per cent, against its earlier offer of 39 per cent farm-duty cuts.

Negotiators said it now appeared difficult for the negotiations to begin before 2009, until after the US presidential elections.

Reiterating the country's position at the meeting, Nath said developing countries could not let their subsistence farmers lose their livelihood and food security for providing market access to subsidised agricultural products from developed countries.

The minister pointed out that some developed countries were attempting to convert the latest round of talks into a "market access round" for their products' entry into markets of developing countries, thereby inverting the core development dimension.

Developing countries were being asked to pay a price for the removal of structural distortions by developed countries.

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VIEW FROM UNDER THE RUBBLE

ECONOMIC IMPACT
The World Bank last year estimated that $287 billion could be gained from global trade liberalisation, which would lift 66 million people out of poverty.

FUTURE OF TRADE
The Doha round's suspension could speed up bilateral and regional trade deals. The EU has said its priority is Doha but it plans other deals, especially in Asia where the US has been active.

LOST GAINS
The collapse puts at risk some of the pledges made during nearly five years of negotiations. The EU, for example, had agreed to end all direct subsidies to exporters of farm goods by 2013.

TRADE DISPUTES
This could trigger an increase in the number of rows. The EU and the US are likely to face the most challenges on farm trade as they are the biggest payers of subsidies to local farmers.

INDIA'S POSITION
India could face increased non-tariff barriers from developed countries. It will compete with cheaper farm products of developed countries but will get breathing space for cutting its duties.