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Trade Ministers Give Up on Compromise
Most immediately endangered is the Doha round, named for the Qatari capital where the WTO launched it in November 2001. The negotiations were proclaimed a "development round," meaning that its special purpose is to change international trade rules so developing countries can reap more of the benefits of world commerce.
Because poor countries typically depend heavily on agriculture, the chief issues include lowering tariffs and quotas that limit their ability to export their farm products, and curbing billions of dollars in subsidies that rich nations pay to their farmers. Such subsidies can lead to overproduction of crops and gluts on world markets that depress prices for farmers in poor countries.
The Bush administration views the round as a prime opportunity to gain new markets for U.S. exporters, especially farmers. It has insisted that other countries with high farm tariffs cut them drastically, in exchange for which the United States would reduce its farm subsidies by more than half. That would benefit poor countries, according to U.S. officials, who cite studies by the World Bank and other institutions showing that the biggest gains the round could bestow on the poor would come from lower barriers to agricultural trade.
But officials of many developing countries rebelled against that view of development at this weekend's meeting. Repeatedly emphasizing their "solidarity" and "unity" at a news conference, ministers from Africa, Latin America and Asia said that while they wanted barriers in rich countries lowered, they had to maintain many of their own high duties. Their farmers, who often operate at near-subsistence levels, need shelter from foreign competition, they said.
"There was a lot of talk about market access," said Mari Pangestu, Indonesia's trade minister, "But this is not about market access, it is about protecting targeted sectors that are vulnerable."
Among the most militant among the developing country ministers was India's Nath. He infuriated U.S. and other officials by announcing on Friday, just as the conference was beginning, that he was strongly considering leaving early because of the lack of promise for a breakthrough. And, according to participants at one Friday night meeting, Nath showed up very late because, he said, he wanted to catch the World Cup soccer match between Argentina and Germany -- although the representatives of Argentina had come to the meeting on time.
Nath and other ministers from developing nations were particularly critical of the United States for refusing to break the stalemate by going further in reducing subsidies. The hard-line U.S. position helped take some of the pressure off of European Union negotiators, who have been vilified at past WTO meetings as the biggest coddlers of rich farmers.
With obvious relish, Peter Mandelson, the European trade commissioner, cited figures at his news conference showing that although the United States is offering to cut the legal ceiling on its subsidy programs, its proposal would allow Washington to spend about $22.6 billion -- more than the $19 billion it paid out last year.
U.S. officials defended their position as the only way to guide the Doha round toward deep cuts in tariffs. They said they could not offer more concessions because other nations had been adamant in maintaining high duties on "sensitive" and special" products -- such as rice, in the case of Japan.
"We did not find closure or even narrow the range" in negotiating positions on that issue, Schwab said. "It was a real eye-opener."
Schwab pointed out that global trade talks have ground to a halt before, an example being the Uruguay round, which appeared to fall apart in 1990 but ended in a deal in 1993.
But Lamy and others have been warning that time is running out for the Doha round. Months would be required to draft a final agreement, which would contain thousands of details on individual tariffs. And after Bush's authority to negotiate broad trade agreements expires in July 2007, any deal submitted to Congress could be picked apart by amendments.
"If we do not turn things around in the next two weeks, we will not make a breakthrough this summer, and then we will be facing defeat," the E.U.'s Mandelson said.