Trade Ministers Give Up on Compromise

Trade ministers Mukhisa Kituyi, left, of Kenya, and Mari Pangestu of Indonesia confer during a news conference yesterday in Geneva after a world trade conference ended prematurely.
Trade ministers Mukhisa Kituyi, left, of Kenya, and Mari Pangestu of Indonesia confer during a news conference yesterday in Geneva after a world trade conference ended prematurely. (By Salvatore Di Nolfi -- Associated Press)

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By Paul Blustein
Washington Post Staff Writer
Sunday, July 2, 2006

GENEVA, July 1-- A conference intended to achieve a last-ditch breakthrough in global trade negotiations collapsed Saturday, sharply diminishing prospects for an agreement that has been touted as a potential boon for the world economy and poor countries in particular.

Trade ministers from about 60 countries, who had planned to negotiate at the World Trade Organization's headquarters here until Sunday and perhaps even Monday, said this morning that they were so hopelessly deadlocked on issues such as reducing farm subsidies and tariffs that they were going home early. The impasse, some said, could undermine the WTO and the multilateral system that has underpinned the expansion of global commerce since the end of World War II.

"There is no need to pretend that this has not been a failure," said Kamal Nath, India's commerce and industry minister. He spoke at a news conference of representatives from developing countries, many of whom blamed the United States for making what they called unreasonable demands on them to open their markets.

Participants in the meeting held out the prospect that negotiations over the next several weeks could result in a compromise by the end of the month on the main issues in the Doha round, the talks begun in 2001 to lower trade barriers worldwide.

"We remain fully committed to an ambitious, robust round and have no intention of giving up hope," said Susan C. Schwab, the U.S. trade representative.

But seasoned trade diplomats expressed skepticism about the chances for a deal because the gaps are so wide and the negotiating positions are so rigid. Inability to reach a compromise this month would almost surely doom chances for completing the Doha round before new political problems complicate the task even further -- prime among them the looming expiration of President Bush's authority to negotiate trade agreements.

"The result of these discussions is pretty clear: There has been no progress. And therefore we are in a crisis," said Pascal Lamy, the WTO director-general.

"I still believe that the differences and the gaps are not unbridgeable," Lamy said. The WTO's 149 member countries authorized him to conduct an intense round of "shuttle diplomacy" this month, aimed at bringing the dissenting parties together, he said. But he conceded that he had not figured out even what the process would be -- whether, for example, he might call ministers to another meeting. "I got this mandate 20 minutes ago," he said.

Since it was established in 1995, the WTO has had a couple of spectacular breakdowns at its meetings, notably in Seattle in 1999 and in Cancun, Mexico, in 2003, where violent protests disrupted the proceedings. No demonstrations disrupted this weekend's meeting, but the discord among the member nations could prove to be more significant, some experts said.

"I think this is worse," said Celine Charveriat, a trade specialist with the aid group Oxfam who was advising developing nations at the meeting. "I haven't seen anybody who has the faintest idea how you can reach a deal."

Fears were widely expressed about the risk of an increasing trend toward negotiating two-way and regional trade agreements, which could sideline the WTO and erode the authority of its tribunals in adjudicating trade disputes.

"Even at this darkest hour, we must restate our sense that we still see the value of the multilateral system," said Kenya's minister of trade and industry, Mukhisa Kituyi.


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