WTO talks risk collapse as US battles China, India
Wednesday, 30 July 2008
GENEVA, July 29 (Agencies): The world's largest commercial powers came into crucial talks on a new global trade pact pledging to assume the shared responsibility needed for solving planetary problems from climate change to food and energy prices.
But they are close to letting an arcane dispute over a seldom-used safeguard on farm imports spoil a trade deal worth billions of dollars to the global economy.
With huge question marks remaining on provisions to open up farm and industrial markets, the World Trade Organisation's leading members Monday were sharply divided over an issue worth practically nothing to the global economy.
A number of trade officials described the debate pitting the United States against China and India as one of principle - and not just hard economics.
"This is an issue that really concerns the livelihood of many developing countries," said Sun Zhenyu, China's WTO ambassador.
India, heavily criticised by the United States and Latin American countries Monday, said the standoff was the result of unreasonable demands from the US and other rich nations.
"If blocking means not accepting whatever the developed countries say, so be it," Trade Minister Kamal Nath told reporters, adding that he has made his position clear on the subject since last week.
He said the idea of a "special safeguard" to deal with a sudden surge of imports or drop in prices had wide support: "It's not only India. We have 100 countries saying the same thing. It's the large economies that are isolated."
Earlier, the United States slammed the two emerging powers, saying they were threatening to scuttle the entire Doha trade round launched in the Qatari capital in 2001.
David Shark, a US trade official, told the WTO's 153 members that the United States has "swallowed hard and accepted" a compromise proposal that includes tighter limits on farm subsidies to American farmers.
But he criticised India for rejecting a package of provisions laid out by World Trade Organisation (WTO) chief Pascal Lamy, and China for backing out of terms it committed to last week.
"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life," Shark said.
While farm import safeguards currently exist in rich and poor countries, they are rarely used. The dispute over the current proposals concerns the threshold for when developing nations could spike their tariffs, and how high those taxes could rise.
Shark accused China and India 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 argue, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.
But China and India were not alone. Faced with rising food prices, a number of developing nations have sought wide loopholes against opening up their farm markets - either by blocking certain strategic products such as rice or grains or through rules that would allow them to raise tariffs sharply if faced with a sudden flood of imports.
Farming in the developing world is "not like manufacturing," said Trade Minister Mari Pangestu of Indonesia, the world's fourth most populous country. "It's not a machine you can just turn on or off."
Rich and poor countries have clashed repeatedly in the round that was once billed as a recipe for lifting millions of people out of poverty. The trade body is hoping for agreement this week on lowering farm subsidies and industrial tariffs, setting the stage for an overall trade accord by the end of the year. Signs of a breakthrough last Friday were followed by more entrenchment over the weekend.
Shark also accused China of trying to carve out cotton, sugar, rice and other commodities from any tariff cuts under a WTO deal. He said Beijing and Delhi were working to protect their own interests by controlling a large group of even poorer nations.
Meanwhile, nine European Union countries yesterday called on the EU's chief trade negotiator to take a firmer line in world trade talks here to protect the continent's farmers, according to Italian negotiators.
The move comes after both French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi slammed a proposed deal at the WTO Doha round of talks in Geneva as insufficient and asking too much of Europe.
Berlusconi expressed worries about the "absence of progress" during talks in Geneva, while the French government said it would not sign proposals for a trade pact as they stand because they show no progress on "essential" matters.
The nine states-dubbed the "Club of Volunteers"-are France, Ireland, Poland, Hungary, Greece, Portugal, Lithuania, Cyprus and Italy, a spokesman for Italy's chief negotiator Adolfo Urso told the news agency.
But they are close to letting an arcane dispute over a seldom-used safeguard on farm imports spoil a trade deal worth billions of dollars to the global economy.
With huge question marks remaining on provisions to open up farm and industrial markets, the World Trade Organisation's leading members Monday were sharply divided over an issue worth practically nothing to the global economy.
A number of trade officials described the debate pitting the United States against China and India as one of principle - and not just hard economics.
"This is an issue that really concerns the livelihood of many developing countries," said Sun Zhenyu, China's WTO ambassador.
India, heavily criticised by the United States and Latin American countries Monday, said the standoff was the result of unreasonable demands from the US and other rich nations.
"If blocking means not accepting whatever the developed countries say, so be it," Trade Minister Kamal Nath told reporters, adding that he has made his position clear on the subject since last week.
He said the idea of a "special safeguard" to deal with a sudden surge of imports or drop in prices had wide support: "It's not only India. We have 100 countries saying the same thing. It's the large economies that are isolated."
Earlier, the United States slammed the two emerging powers, saying they were threatening to scuttle the entire Doha trade round launched in the Qatari capital in 2001.
David Shark, a US trade official, told the WTO's 153 members that the United States has "swallowed hard and accepted" a compromise proposal that includes tighter limits on farm subsidies to American farmers.
But he criticised India for rejecting a package of provisions laid out by World Trade Organisation (WTO) chief Pascal Lamy, and China for backing out of terms it committed to last week.
"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life," Shark said.
While farm import safeguards currently exist in rich and poor countries, they are rarely used. The dispute over the current proposals concerns the threshold for when developing nations could spike their tariffs, and how high those taxes could rise.
Shark accused China and India 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 argue, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.
But China and India were not alone. Faced with rising food prices, a number of developing nations have sought wide loopholes against opening up their farm markets - either by blocking certain strategic products such as rice or grains or through rules that would allow them to raise tariffs sharply if faced with a sudden flood of imports.
Farming in the developing world is "not like manufacturing," said Trade Minister Mari Pangestu of Indonesia, the world's fourth most populous country. "It's not a machine you can just turn on or off."
Rich and poor countries have clashed repeatedly in the round that was once billed as a recipe for lifting millions of people out of poverty. The trade body is hoping for agreement this week on lowering farm subsidies and industrial tariffs, setting the stage for an overall trade accord by the end of the year. Signs of a breakthrough last Friday were followed by more entrenchment over the weekend.
Shark also accused China of trying to carve out cotton, sugar, rice and other commodities from any tariff cuts under a WTO deal. He said Beijing and Delhi were working to protect their own interests by controlling a large group of even poorer nations.
Meanwhile, nine European Union countries yesterday called on the EU's chief trade negotiator to take a firmer line in world trade talks here to protect the continent's farmers, according to Italian negotiators.
The move comes after both French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi slammed a proposed deal at the WTO Doha round of talks in Geneva as insufficient and asking too much of Europe.
Berlusconi expressed worries about the "absence of progress" during talks in Geneva, while the French government said it would not sign proposals for a trade pact as they stand because they show no progress on "essential" matters.
The nine states-dubbed the "Club of Volunteers"-are France, Ireland, Poland, Hungary, Greece, Portugal, Lithuania, Cyprus and Italy, a spokesman for Italy's chief negotiator Adolfo Urso told the news agency.