World trade talks fail as US clashes with new giants

MARATHON talks for a new global trade deal collapsed last night after a clash over agriculture between the United States, the world's biggest economy, and emerging heavyweights.

The breakdown came on the ninth day as the US and India failed to find a compromise on measures intended to help poor countries protect their farmers against import surges, a diplomat said.

US trade representative Susan Schwab appeared downcast as she began to brief reporters.

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She said negotiators were "so close on Friday", but then stopped speaking. Asked if the entire Doha trade round was over, she said, "I didn't say that" and walked away.

However, the failure of the talks to find agreement on the core agriculture and industrial goods chapters of the Doha trade round could delay any final accord on trade liberalisation for several more years.

Washington had opposed a push from India, China and Indonesia to secure measures to protect their farmers if faced with sudden surges of cheap farm imports.

The impasse derailed substantial progress that had been made on other agricultural, manufacturing and services trade issues.

As failure looked likely, Phil Goff, New Zealand's trade minister, held out hope for Doha talks continuing at a later date.

"I hope… that what we've achieved this week can be used at least to build on as a foundation for the future," he said.

Peter Power, a spokesman for the European Union, called the breakdown a "massive blow to confidence in the global economy".

The negotiations for a global deal trade began in 2001 in the hope of boosting the world economy and helping poor countries.

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Some officials had described this meeting at the WTO's Geneva HQ as a last chance for the trade round launched in Qatar's capital back then, noting that US and other national elections would make negotiations difficult over the next couple of years.

Without a final deal, Europe will not be required to open up its farm markets to emerging powers in Latin America and elsewhere. Brazil, China, India and other fast-growing developing nations won't have to ease access to manufacturing imports from the rich world. And the US will not have to make any tough decisions on the billions of dollars in farm subsidies it pays out to American growers of cotton, soyabean, rice and other staples.

The debate over farm subsidies has taken on added significance amid the recent spike in food prices around the world. Poorer nations say the payments distort global farm markets and hinder the development of sustainable agriculture in the Third World.

But talks over the last nine days had brought consensus on many of the problems that scuttled major trade meetings in Cancun, Mexico, in 2003 and in Hong Kong two years later.

A number of trade officials described the debate pitting the US against China and India as one of principle – and not just hard economics. Others blamed a lack of courage for the stand-off.

"It is a jump in the dark," Celso Amorim, Brazil's foreign minister, said before the final efforts yesterday. "You can't calculate until the very last situation all the hypotheses. If you do that (the round) will never finish. It will take two years, three years. It will probably be for a new generation."

The issue concerned a "special safeguard" that developing countries, led by China and India, have demanded to deal with a sudden surge of imports or drop in prices.

While farm import safeguards exist in rich and poor countries, they are rarely used. The dispute over the current proposals concerns the threshold for when developing nations could sharply raise their tariffs, and by how high those taxes could rise.

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The US had accused the two emerging powers of insisting on allowances to raise farm tariffs above even their current levels. That violates the spirit of the trade round, the US and other agricultural exporters argued, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.

Strain takes its toll on exhausted negotiators

THE World Trade Organisation's marathon-running chief pushed diplomats to their physical limits in gruelling late-night negotiating sessions.

"People are visibly tired. This is the longest we have ever gone like this in a ministerial conference," said a trade official who took part in the talks chaired by Pascal Lamy.

The mood at the WTO's Geneva HQ swung from hopeful to jovial to frank to "extremely tense" over the unprecedented nine-day talks, the official said.

"They were getting really frazzled. They have been working round the clock."

Mr Lamy had called ministers to Geneva to push for a basic deal in the Doha round of talks, which began in 2001 and were meant to wrap up in January 2005, nine months before he took over as WTO chief. The Frenchman quickly reduced the talks to a subset of seven ministers.

But compromise proposals palatable to the small group received a mixed reception from the WTO's wider membership and caused a split between India and its ally Brazil.

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