Trade talks fail over impasse on farm tariffs
Trade talks fail over impasse on farm tariffs
By Tom Wright and Steve Weisman
Copyright by The International Herald Tribune
Published: July 24, 2006
GENEVA Negotiations aimed at reaching a new global trade agreement collapsed here Monday, touching off a bitter new round of recriminations between the United States and Europe over farm trade barriers and dealing a blow to the Bush administration's international economic agenda.
After two days of discussions among negotiators from the United States, the European Union, Japan, Brazil, India and Australia, the director general of the World Trade Organization, Pascal Lamy, formally suspended the talks.
The inability of negotiators to reach a deal here on talks begun in Doha, Qatar, in 2001, does not mean that the global effort to reduce trade barriers is dead, but it is significant because it is likely to delay efforts to liberalize trade by months, if not years.
U.S. trade officials said there appeared to be little prospect of the talks resuming any time soon, probably dooming the chances of a trade accord during President George W. Bush's remaining time in office.
"This is a serious failure we find ourselves in," the U.S. trade representative, Susan Schwab, said, "and the question is how do we regroup."
The EU agriculture commissioner, Mariann Fischer Boel, said, "It is a big failure, and whether it is going to be definitive, only time will tell."
Negotiators said they were unlikely to come back to the table in the near future because of large differences over farm supports.
They had said earlier that if the outlines of an agreement were not secured by late this month, it would be nearly impossible to negotiate a trade-expanding agreement before the mid-2007 expiration of so-called fast-track authority that requires the U.S. Congress to accept or reject any trade deal without addressing specific provisions.
Bush's authority to negotiate a trade deal and get such a vote expires in mid- 2007, and it is doubtful that Congress can approve any deal before then.
The failure of the talks was particularly embarrassing because only last month, at the St. Petersburg summit meeting of world leaders, Bush and other leaders had called for a redoubled effort to make concessions in the trade area and break the impasse that has paralyzed the discussions for years.
European and Indian negotiators said that Europe offered on Sunday evening to move further than it had previously to reduce tariffs on agricultural imports - a crucial issue that had held up a deal. But the United States said that the offer did not go far enough, and the U.S. delegation declined to make its own improved offer to reduce agricultural subsidies.
The top U.S. trade officials, Schwab and Mike Johanns, the U.S. agriculture secretary, said that the United States had come to Geneva prepared to make further concessions on lowering agriculture tariffs and what are called trade-distorting subsidies that enable farmers to compete with overseas farm imports. But they said that the Europeans and some developing countries failed to make similar offers.
"We are ready to be flexible," said Johanns. "There just was nothing there to grab on to to let us take that step."
But European negotiators said that Washington had been intransigent in not recognizing that the EU had gone through a series of painful cuts in tariffs and farm subsidies for their own farmers and in not meeting those steps with still more American concessions.
"Unfortunately," the European trade commissioner, Peter Mandelson, said, "the Americans were not able or willing to do their part. They preferred to stand still."
For example, the United States offered to lower farm subsidies to $19.7 billion from their current level of $47.9 billion, but Europeans said that these numbers were misleading and that the U.S. offer was actually much less than that.
Lamy declined to pin the blame on any of the negotiators, saying the political will to reach an agreement was just not there. "There are no winners or losers in this assembly," he said. "Today there are only losers."
Developing countries like Brazil and India have been demanding that rich nations tear down tariff walls and cut billions that they spend annually protecting farmers before they begin to open markets to Western manufactured goods and services.
Trade deals have a history of rough going in Congress, and the Bush administration concluded that it could not get approval for a trade deal without American farmers being certain that they could win much bigger access for their products in Europe, India, China and other countries.
After the St. Petersburg Group of 8 meeting, Lamy held what American officials said was a "confessional" round of talks in which he asked each party to "confess" privately what it would offer hypothetically if other parties might be more forthcoming in their concessions.
The Bush administration was stymied, American officials acknowledged, because the farm bloc in the United States had become so distrustful of other protectionist practices that they told officials that they could not support a trade deal that did not have dramatically better access for their farm products.
India's trade minister, Kamal Nath, said Monday that a demand made by the United States on developing countries to open their markets in exchange for cuts in farm supports was unacceptable given that the Doha round was aimed foremost at ending unfair agricultural protection of farmers in Europe and the United States. "We say there should be fair trade, not only free trade," Nath said.
Opinion was divided over what the suspension of talks meant for the future of the WTO, which was founded in 1995 in a bid to deepen trade liberalization begun with the Bretton-Woods agreements after World War II. Politicians said they remained committed to the WTO and expected at some point to come back to the table.
"There have been other rounds before Doha that lasted much longer than foreseen, which dragged on, and one cannot rule out this being the case for the Doha round," Christine Lagarde, the French minister for foreign trade, was quoted by Agence France-Presse as saying in Paris. "For now, we are somewhere between a long delay and failure."
The last series of trade talks, known as the Uruguay Round of negotiations, lasted seven and a half years, from 1986 to 1994, instead of the intended three, but an agreement was eventually concluded.
"Even though today truly represents a failure, this is not the time to pull offers off the table, to talk about take it or leave it," Johanns said. "If you look at the history of the Uruguay round, it stopped and started a number of times."
But others were less optimistic.
"I think this would seem to lead to the collapse of the multilateral trading system," said Jean-Pierre Lehmann, founder of the free-trade Evian Group based in Switzerland.
The ability of interest groups like agricultural lobbyists to completely block progress makes it very difficult to move talks forward on a multilateral basis, Lehmann noted.
The National Foreign Trade Council, a U.S.-based business group representing 300 American companies, said: "The NFTC is deeply disappointed that the negotiations have been suspended. This is a setback to the credibility of the WTO and frankly, it shows a lack of political leadership and vision among WTO members when it mattered most."
But the setback at the WTO is unlikely to stop trade from expanding, business groups said, mainly because trading powers like the United States and European Union will continue to sign bilateral and regional free trade agreements.
"This is a temporary setback," said Guido Glania, director of international trade at the Federation of German Industries. "But trade liberalization goes on. Each month there is a new bilateral trade deal concluded."
Trade has continued to grow in recent years despite wrangling at the WTO. Worldwide merchandise exports, which exclude services, increased to $9.12 trillion in 2004 from $6.45 trillion in 2000, according to WTO statistics.
But the worry, said Celine Charveriat, head of the advocacy group Oxfam's fair trade campaign, is that bilateral agreements leave out the poorest countries, many of them in Africa, that the Doha round was supposed to help.
"We are concerned that the European Union and the United States will turn to damaging regional trade agreements to break open developing country markets," she said.
Steve Weisman of The New York Times reported from Washington.
By Tom Wright and Steve Weisman
Copyright by The International Herald Tribune
Published: July 24, 2006
GENEVA Negotiations aimed at reaching a new global trade agreement collapsed here Monday, touching off a bitter new round of recriminations between the United States and Europe over farm trade barriers and dealing a blow to the Bush administration's international economic agenda.
After two days of discussions among negotiators from the United States, the European Union, Japan, Brazil, India and Australia, the director general of the World Trade Organization, Pascal Lamy, formally suspended the talks.
The inability of negotiators to reach a deal here on talks begun in Doha, Qatar, in 2001, does not mean that the global effort to reduce trade barriers is dead, but it is significant because it is likely to delay efforts to liberalize trade by months, if not years.
U.S. trade officials said there appeared to be little prospect of the talks resuming any time soon, probably dooming the chances of a trade accord during President George W. Bush's remaining time in office.
"This is a serious failure we find ourselves in," the U.S. trade representative, Susan Schwab, said, "and the question is how do we regroup."
The EU agriculture commissioner, Mariann Fischer Boel, said, "It is a big failure, and whether it is going to be definitive, only time will tell."
Negotiators said they were unlikely to come back to the table in the near future because of large differences over farm supports.
They had said earlier that if the outlines of an agreement were not secured by late this month, it would be nearly impossible to negotiate a trade-expanding agreement before the mid-2007 expiration of so-called fast-track authority that requires the U.S. Congress to accept or reject any trade deal without addressing specific provisions.
Bush's authority to negotiate a trade deal and get such a vote expires in mid- 2007, and it is doubtful that Congress can approve any deal before then.
The failure of the talks was particularly embarrassing because only last month, at the St. Petersburg summit meeting of world leaders, Bush and other leaders had called for a redoubled effort to make concessions in the trade area and break the impasse that has paralyzed the discussions for years.
European and Indian negotiators said that Europe offered on Sunday evening to move further than it had previously to reduce tariffs on agricultural imports - a crucial issue that had held up a deal. But the United States said that the offer did not go far enough, and the U.S. delegation declined to make its own improved offer to reduce agricultural subsidies.
The top U.S. trade officials, Schwab and Mike Johanns, the U.S. agriculture secretary, said that the United States had come to Geneva prepared to make further concessions on lowering agriculture tariffs and what are called trade-distorting subsidies that enable farmers to compete with overseas farm imports. But they said that the Europeans and some developing countries failed to make similar offers.
"We are ready to be flexible," said Johanns. "There just was nothing there to grab on to to let us take that step."
But European negotiators said that Washington had been intransigent in not recognizing that the EU had gone through a series of painful cuts in tariffs and farm subsidies for their own farmers and in not meeting those steps with still more American concessions.
"Unfortunately," the European trade commissioner, Peter Mandelson, said, "the Americans were not able or willing to do their part. They preferred to stand still."
For example, the United States offered to lower farm subsidies to $19.7 billion from their current level of $47.9 billion, but Europeans said that these numbers were misleading and that the U.S. offer was actually much less than that.
Lamy declined to pin the blame on any of the negotiators, saying the political will to reach an agreement was just not there. "There are no winners or losers in this assembly," he said. "Today there are only losers."
Developing countries like Brazil and India have been demanding that rich nations tear down tariff walls and cut billions that they spend annually protecting farmers before they begin to open markets to Western manufactured goods and services.
Trade deals have a history of rough going in Congress, and the Bush administration concluded that it could not get approval for a trade deal without American farmers being certain that they could win much bigger access for their products in Europe, India, China and other countries.
After the St. Petersburg Group of 8 meeting, Lamy held what American officials said was a "confessional" round of talks in which he asked each party to "confess" privately what it would offer hypothetically if other parties might be more forthcoming in their concessions.
The Bush administration was stymied, American officials acknowledged, because the farm bloc in the United States had become so distrustful of other protectionist practices that they told officials that they could not support a trade deal that did not have dramatically better access for their farm products.
India's trade minister, Kamal Nath, said Monday that a demand made by the United States on developing countries to open their markets in exchange for cuts in farm supports was unacceptable given that the Doha round was aimed foremost at ending unfair agricultural protection of farmers in Europe and the United States. "We say there should be fair trade, not only free trade," Nath said.
Opinion was divided over what the suspension of talks meant for the future of the WTO, which was founded in 1995 in a bid to deepen trade liberalization begun with the Bretton-Woods agreements after World War II. Politicians said they remained committed to the WTO and expected at some point to come back to the table.
"There have been other rounds before Doha that lasted much longer than foreseen, which dragged on, and one cannot rule out this being the case for the Doha round," Christine Lagarde, the French minister for foreign trade, was quoted by Agence France-Presse as saying in Paris. "For now, we are somewhere between a long delay and failure."
The last series of trade talks, known as the Uruguay Round of negotiations, lasted seven and a half years, from 1986 to 1994, instead of the intended three, but an agreement was eventually concluded.
"Even though today truly represents a failure, this is not the time to pull offers off the table, to talk about take it or leave it," Johanns said. "If you look at the history of the Uruguay round, it stopped and started a number of times."
But others were less optimistic.
"I think this would seem to lead to the collapse of the multilateral trading system," said Jean-Pierre Lehmann, founder of the free-trade Evian Group based in Switzerland.
The ability of interest groups like agricultural lobbyists to completely block progress makes it very difficult to move talks forward on a multilateral basis, Lehmann noted.
The National Foreign Trade Council, a U.S.-based business group representing 300 American companies, said: "The NFTC is deeply disappointed that the negotiations have been suspended. This is a setback to the credibility of the WTO and frankly, it shows a lack of political leadership and vision among WTO members when it mattered most."
But the setback at the WTO is unlikely to stop trade from expanding, business groups said, mainly because trading powers like the United States and European Union will continue to sign bilateral and regional free trade agreements.
"This is a temporary setback," said Guido Glania, director of international trade at the Federation of German Industries. "But trade liberalization goes on. Each month there is a new bilateral trade deal concluded."
Trade has continued to grow in recent years despite wrangling at the WTO. Worldwide merchandise exports, which exclude services, increased to $9.12 trillion in 2004 from $6.45 trillion in 2000, according to WTO statistics.
But the worry, said Celine Charveriat, head of the advocacy group Oxfam's fair trade campaign, is that bilateral agreements leave out the poorest countries, many of them in Africa, that the Doha round was supposed to help.
"We are concerned that the European Union and the United States will turn to damaging regional trade agreements to break open developing country markets," she said.
Steve Weisman of The New York Times reported from Washington.
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