Last-minute snag derails WTO negotiations

The refusal of China and India to drop a proposal that would have allowed so-called developing countries to increase tariffs on imported food has led once again to a collapse of the Doha Round WTO negotiations.

The Bush administration’s offer to cut U.S. farm subsidies even further was not enough to carry the day as the negotiations became ensnared in a debate over a “safeguard” provision that would have allowed those developing countries to protect their farmers in times of decreasing commodity prices.

U.S. farm organizations applauded U.S. Trade Representative Susan Schwab for refusing “to settle for a bad agreement” that could have brought the nearly seven years of World Trade Organization talks to a close. Other groups bemoaned the collapse as another “lost opportunity” to lift millions out of poverty.

“As the Geneva talks progressed, it became clear that some World Trade Organization members were not willing to open their markets and even tabled proposals that would impose greater restrictions on market access than exist today,” the National Cotton Council said in a statement.

“Ambassador Schwab, USDA Chief Economist Joe Glauber, and USDA Undersecretary Mark Keenum insisted on a balance between disciplines on agricultural support and gains in market access, and the direction of the negotiations failed to provide that balance.”

The Council, which was represented in the talks in Geneva by Chairman Larry McClendon, a cotton producer from Marianna, Ark., and Council President Mark Lange, may have had more to lose from the talks than other U.S. farm groups.

Almost since the day the talks began in Doha, Qatar, in 2002, Oxfam International and other non-governmental organization have been attempting to force the United States to eliminate its cotton program, claiming it was responsible for poverty in Africa and other world ills.

Schwab appeared downcast when she briefed reporters following the breakdown in the negotiations. “While we made good progress during the past week, it is clear that despite our best efforts we will not be able to reach a breakthrough at this time,” she said in a statement.

“There should be no question we made important progress. Even today, five of the seven countries in the leadership group were prepared to accept the Friday proposal by Director General Pascal Lamy.”

The two countries — China and India — refused to back away from a provision that would have allowed developing countries to raise tariffs to protect agricultural producers if commodity prices — which currently are at near-record levels — began falling again.

Schwab said the Bush administration would stand by its offer to reduce the cap on U.S. farm subsidies to $14.5 billion from the current $19.1 billion. “But we maintain they are still contingent on others coming forward with ambitious offers that will create new market access. So far, that ambition is not evident.”

Agriculture Secretary Ed Schafer sounded a more hopeful note, saying he preferred to use the term “impasse” rather than collapse.

“If you look at the progress made in the last several months, we’ve moved in big directions,” he said. “The United States took the lead in saying, ‘We’ll reduce internal subsidies, we want access to markets.’

“Hopefully, we’ll continue discussions and see our way through some of these issues and continue to make progress.”

Congressional leaders, who would have to approve any reduction in U.S. farm subsidies, said the talks cast doubt on whether the leaders of China and India were sincere about their willingness to negotiate a new WTO agreement.

“It was clear from reports that our trading partners weren’t prepared to offer serious market access to our goods,” said Sen. Blanche Lincoln, D-Ark., chairman of the Finance Committee’s International Trade and Global Competitiveness Subcommittee.

“In fact, China and India were backpedaling on prior commitments. Prior to and during the negotiations, I repeated my belief to Ambassador Schwab that no deal was better than a bad deal when it comes to our farm families and the communities they support.”

Lincoln said she hoped the collapse of the talks would give negotiators time to “take a step back and assess the situation going forward.”

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