Geneva: Indian commerce minister Kamal Nath called on Wednesday for the World Trade Organization (WTO) to treat the latest breakdown in talks for a global trade pact as a “pause, not a breakdown”, as advanced and emerging economies blamed each other for the failure.
(WINNERS AND LOSERS) “I would only urge the director general (Pascal Lamy) to treat this as a pause, not a breakdown, to keep on the table what is there,” Nath told a news conference the morning after the talks collapsed.
(NINE DAYS ON THE WTO TRADE TALKS ROLLER COASTER) “What is at stake is not mere commercial interest, but so many benefits to our African friends, to our LDCs (least developed countries), we’ll have to not let these fritter away.”
The Geneva talks fell apart on Tuesday after nine gruelling days of negotiations aimed at reaching a consensus on subsidy levels and import tariffs for a new deal under the WTO’s seven-year-old Doha Round.
Delegates said negotiations stumbled on proposals for a so-called special safeguard mechanism (SSM) to protect poor farmers that would have imposed a special tariff on certain agricultural goods in the event of an import surge, or price fall.
The US and India failed to reconcile differences over the proposal.
India and other developing countries wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation. Nath said about 100 developing nations backed his position. Others wanted it to take effect at a higher rate so as not to hurt exporters.
The Indian minister insisted that SSM was the “bedrock of this round” and that he could not “put at stake the livelihood of one billion people”.
Nath added: “I go back with a very heavy heart. For me personally, I thought it would be a great sense of fulfilment that all the time and years that I’ve invested into this round would see a closure.”
WTO chief Lamy stressed on Wednesday that there should be no going back on advances made at the failed talks and that the gains must stay on the table.
Commenting that the negotiations had disclosed a “new world landscape” in which emerging economies were determined to make a mark, he said: “Let’s not go backwards.”
He told French Info radio: “We made enormous progress, but not quite enough.”
Lamy said that on agriculture, disagreement was not only between developed and developing countries, but also between exporting and importing countries. “This is why, politically, it is very complex.”
This was also “evidence of a new world landscape in which emerging powers, such as India, China and Brazil, want to leave their mark on world trade”.
“We will need to let the dust settle a bit,” Lamy had said earlier. “WTO members will need to have a sober look at if and how they bring the pieces back together.
US trade representative Susan Schwab rued that the talks had broken down after certain countries rejected WTO proposals. “It would have worked, and yet there were others who demanded more, and more included a tool to close markets,” Schwab said, without naming names.
Food trade barriers
Schwab said it was an “irony” that “all of these debates about how easy, or how hard it should be to raise barriers to food imports took place in the context of a global food crisis”.
“The last thing we should be thinking about is raising barriers to trade in food,” she said.
Japan upbraided China and India, as growing economic powers, for not shouldering greater responsibilities in the WTO. “Frankly, I’d have to wonder whether China and India weighed their words and actions commensurate with their responsibility and how much they considered the overall global economy as they focused too much on their own interests,” chief cabinet secretary Nobutaka Machimura told a news conference.
Both India and China now wield more economic influence than they did when the trade talks were launched in Doha, the capital of Qatar, in 2001, Machimura told a news conference. “In other words, their responsibilities have also grown bigger too,” he said. “I hope China and India will address international negotiations like the WTO talks with a sense of how big a role they play in the world economy.”
China, too, gently chided India for the way the talks ended in what commerce minister Chen Deming called “tragic failure”. Chen expressed his regret that the talks had foundered over differences between two countries—a reference to the US and India—over a proposal to help poor farmers cope with import surges.
Trade experts in India dismissed any idea that New Delhi had been obstructionist.
“Our position had been clear right from the beginning that you cannot compromise the livelihood security of the small farmers,” said Nagesh Kumar, director general at think tank Research and Information System for Developing Countries.
T.K. Bhaumik, chairman of the economic affairs panel of the Associated Chambers of Commerce and Industry of India, said responsibility should be shared jointly by India,Brazil, the US and the European Union. “It is a big setback for multilateralism and it is now clear that multilateralism has no future.”
WTO fault lines
The recriminations reflect the many fault lines running through the WTO talks, which must reconcile the different political and economic priorities of the body’s 153 members.
The number of preferential trade deals involving Asia-Pacific countries has exploded in recent years, largely due to the deadlock in the WTO, and experts expect the trend to continue. China is ready to intensify its bilateral links with other WTO members, especially developing countries, Chen said in a statement.
Chile and Australia signed the latest two-way deal on Wednesday in Canberra, shortly after the WTO talks broke down.
Australia’s foreign minister Stephen Smith said his country would let the dust settle on global talks and then try to work a way forward. “With world trade talks, the job is never done. It’s deeply disappointing, but we know that both Chile and Australia will be at the vanguard and the forefront of continuing to try to push the international community,” Smith told reporters.
Reuters contributed to this story.