Talks between trade powers to salvage global trade talks collapsed on Thursday, throwing the future of the World Trade Organisation's struggling round deeper into doubt. Ministers from the United States and the European Union (EU), representing rich nation interests, and Brazil and India, for the developing world, were quick to blame the other side for the failure.
Without an agreement between the four powers at their meeting in Potsdam, diplomats and trade officials had warned that it would be difficult for the full 150-member state WTO to strike a deal as hoped by the end of July.
"Potsdam, once again, was not very successful," Brazil's Foreign Minister Celso Amorim told a news conference. "It was useless to continue the discussion on the basis of the numbers put on the table," he said.
The four were attempting to break a long-standing deadlock over the core issues in the near six-year round - how far to open up agricultural and industrial markets and cut rich nation farm subsidies. But despite the severe setback, the ministers insisted that the Doha liberalisation round was not dead.
"It (the failure) places a very major question mark on the ability of the wider membership of the WTO to complete this round," EU Trade Commission Peter Mandelson told journalists. "(But) It does not in itself mean that the negotiations cannot be put back on track," he added.
US Trade Representative Susan Schwab said: "We certainly have not given up on the (Doha) process but this is not a happy outcome." WTO boss Pascal Lamy has warned that without a breakthrough in the round by August, the near six-year-old negotiations could be put on hold for several more years or even fail altogether.
Launched in the Qatari capital in late 2001, the round aims to lift millions out of poverty through more trade. But it has faced problems from the start, mainly over agriculture, which is a highly sensitive political issue almost everywhere. Washington has demanded that any deal that significantly cuts US farm subsidies must open new export markets around the world in agriculture, manufacturing and services.
But Brazil and India said Washington was not prepared to go far enough to warrant additional concessions on their part in manufacturing goods or in lowering barriers to imports of US farm goods. "If the round is to move forward, there will have to be a substantial attitude change," said India's Commerce and Industry Minister Kamal Nath.
But EU officials told journalists the sort of tariff cuts being offered by Brazil would not have led to any additional exports from companies from the developed world. In a letter to Schwab and Mandelson on Wednesday, leading US and European manufacturers warned they could not support an agreement that did little to open developing countries to additional exports.
Nevertheless, hopes had been running high going into the four-power talks, which began on Tuesday, after a series of meetings between senior officials had appeared to remove some obstacles.
Trade officials have said that whatever the outcome in Potsdam, negotiators would continue to work at the WTO headquarters in Geneva to reach a deal which many see as vital to act as a bulwark against protectionism. "We are obviously very disappointed talks have broken down. But they will now move to Geneva and there's still a chance to rescue them," a British government spokeswoman said.
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