labels: Trade, Economy - general
Farm trade row freezes prospects of global trade deal news
29 July 2008

Pascal LamyMumbai: The ministerial meeting of the World Trade Organisation that aims to push the Doha Round of negotiations towards a final deal were on the brink of collapse on Tuesday with developing countries like China and India opposing a ''so-called'' compromise draft on agricultural trade brought out by WTO director-general Pascal Lamy.

Developing countries led by India and China, who have sought safeguards against huge imports from the US and EU, whose agriculture is heavily subsidised, are at loggerheads with the United States.

India and China say western farm subsidies are distorting agricultural trade and have sought safeguard import limits to protect their own agriculture against import of heavily subsidised western farm produce.

The safeguards mechanism allows countries to protect poor farmers by imposing a special tariff on certain agricultural goods in the event of an import surge or price fall. Countries led by India and China want that mechanism to trigger at a lower level, while the US want that measure to take effect at a higher level.

Trade representatives said the ministers were looking for a new compromise proposal on the safeguards to avoid failure, as talks entered their ninth day, with rich nations urging flexibility on the part of poor and developing countries to avert a collapse.

''If people don't want this deal, there's no better deal coming along and we just have to consider, if this fails, what they will lose," European Union Trade Commissioner Peter Mandelson said as the EU members put up a united front.

But no one at Geneva seems ready to declare failure of the talks.

''Some of us are willing to stay as long as it takes. We will stay a few more days if it is necessary," said Indonesian trade minister Marie Elka Pangestu.

Negotiators from China and India were, meanwhile, digging in their heels on the ''special safeguard mechanism" against import surges in food products such as rice especially from the United States.

The revised proposals on agricultural trade also tries to pit developing country farm exporters like Paraguay and Uruguay against other poor nations like Thailand and Cambodia that are worried about their farmers' survival.

Both India and the new trade powerhouse China, which is participating in a WTO negotiating round for the first time, accuse the United States of making excessive demands on developing countries.

''The crux of the current serious difficulties that have arisen in the Doha Round negotiations is that, having protected its own interests, the United States is asking a price as high as heaven," Xinhua news agency quoted Chinese commerce minister Chen Deming as saying.

US negotiators are sticking to openness in trade while  the nine EU states - a third of the total and including EU heavyweight France – demanding better terms for the bloc – are adding to concerns that compromises made last week to rescue the talks could now disintegrate.

Germany, the world's biggest exporter, however, remained in favor of a deal, EU sources said.

The world trade negotiations, launched in the Qatari capital Doha seven years ago, has repeatedly foundered over differences on subsidies and import tariffs.

''The compromise has to come from both sides who are involved - it means US and India principally and other developing countries," said EU trade commissioner Peter Mandeleson.

''If they don't demonstrate the will to compromise, then I'm afraid the deal will go down, it's as an appalling prospect as that," the EU trade chief warned.

Brazil's foreign minister Celso Amorim, meanwhile, called on politicians to step up to the challenge and shoulder political responsibility by taking risks.

''Political responsibility is also about taking risks. It's not about doing what you're absolutely sure, otherwise we could have computers here instead of negotiators," he said.
The mood is sombre as optimism of a breakthrough in negotiations gave way to uncertainty.


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Farm trade row freezes prospects of global trade deal