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After Faltering for Months, Global Free Trade Talks Suspended

BY Admin  July 25, 2006 at 1:30 PM EDT

Pascal Lamy Announcing Suspension of Talks

The head of the World Trade Organization, Pascal Lamy, made the announcement Monday evening, saying “We are in dire straits” and urging all sides to continue to try and revive the latest round of talks.

The Doha round, first begun in the Qatari capital in 2001, were aimed at lowering tariffs and other trade barriers to allow better access for developing nations. But after nearly five years of negotiations, deep differences between the United States and European Union derailed the faltering process.

“This is a serious failure we find ourselves in, and the question is how do we regroup,” U.S. Trade Representative Susan Schwab said Monday.

Some representatives from the developing world cast an even bleaker tone, with India’s Trade and Industry Minister Kamal Nath announcing the talks were “somewhere between intensive care and the crematorium.”

The collapse of the negotiations after two days of last-ditch talks prompted European and American officials to blame each other for not making enough concessions.

“The United States judged that it would be better for the process to be discontinued at this stage,” said EU trade chief Peter Mandelson.

“Surely the richest and strongest nation in the world, with the highest standards of living in the world, can afford to give as well as take,” Mandelson said, adding that the stoppage in negotiations “was neither desirable nor inevitable. It could so easily have been avoided.”

Mandelson’s remarks drew a sharp rebuke from the United States.

“Yesterday’s statement by the EU alleging that the United States failed to show flexibility … and attempting to divert blame for the stalemate is false and misleading,” the U.S. trade mission in Geneva said in a statement Tuesday.

For advocacy groups working to aid developing countries, there was blame on both sides of the Atlantic.

“The intransigence shown by both Europe and the United States over the course of these talks is clearly the reason for their failure,” said Luis Morago, the head of the international aid agency Oxfam in Brussels, Reuters reported.

Much of the American resistance to the talks stemmed from demands that it drastically reduce its tariffs and other programs that kept the price of foreign agricultural goods artificially high and prevented developing countries from exporting their produce to the United States.

But Schwab said Lamy told U.S. negotiators there wasn’t enough movement among other countries to put additional U.S. offers on the table and that the EU was trying to protect itself by blaming the United States.

“The finger-pointing can’t hide the fact that their average tariff is twice as high as ours and that their farm subsidies are more than three times what ours are,” Schwab said on a conference call with reporters, the Associated Press reported.

Oxfam, for one, expressed skepticism that either side would budge on the politically sensitive issue of farm subsidies.

“You could give this four weeks, four months, four years or four centuries. It doesn’t make a difference,” said the organization’s spokesman Matt Grainger. “The U.S. and the EU refuse to accept that they have to cut their agricultural support.”

Business officials in Brussels for the talks said they hoped that free trade efforts would continue but focus more on bilateral treaties between individual nations or regions, rather than the global pact the Doha round had aimed to create.