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TMCNet: 6TH LD: Key WTO ministerial talks collapse over farm issues+

[July 29, 2008]

6TH LD: Key WTO ministerial talks collapse over farm issues+

(Japan Economic Newswire Via Acquire Media NewsEdge) GENEVA, July 30_(Kyodo) _ (EDS: RECASTING, ADDING REMARKS)

Key free trade talks under the World Trade Organization collapsed Tuesday, although a historic deal was within sight at one point, as the United States and emerging economies clashed over politically delicate farm issues at the very last minute.

With the failure, the WTO's seven-year-old Doha Round free trade talks are likely to be put on ice for a couple of years partly because the United States is unlikely to take any decisive action on trade issues until some time after the change in presidential administration in January next year.

"I think there's no use beating around the bush. This meeting has collapsed," WTO Director General Pascal Lamy said at a news conference after more than a week of tough day-and-night negotiations. "Members have simply not been able to bridge their differences."

Lamy said he is disappointed as they have achieved about 80 to 85 percent of what he thought was required to clinch an outline deal in the key areas of agricultural and manufactured goods.

Ministers from more than 30 major economies, including Brazil, China, the European Union, India, Japan and the United States -- walked away from the bargaining table at the WTO headquarters where they had been seeking an outline deal necessary to unlock the long-delayed Doha Round process.

The latest marathon talks tested the future of the multilateral trading system, as well as the stamina of top negotiators.

Akira Amari, Japanese economy, trade and industry minister, said the collapse "deals a serious blow to the global economy."

"We have played our part believing that we could contribute to spurring the world economy" at a time when it is at a risk of a slowdown.

Their talks had been rescued from the brink of collapse on Friday night by a set of compromise proposals prepared by Lamy, aimed at narrowing differences over so-called modalities -- key figures for cuts in tariffs on agricultural and industrial goods, and farm subsidies.

But that new-found optimism evaporated very quickly after the United States clashed with China and India over the extent of easing the terms for poor countries to use the so-called special safeguard mechanism, which would allow poor countries to raise tariffs on agricultural produce in the event of an import surge.

"In the face of the global food price crisis, it is ironic that the debate came down to how much and how fast could nations raise their barriers to imports of food," U.S. Trade Representative Susan Schwab told reporters.

Indian Commerce Minister Kamal Nath has stressed that the original objective of the current round, officially called the Doha Development Agenda, is poverty alleviation and it should be remembered that protection of farmers is a matter of life and death for many poor countries, which are now a large majority of the trade body.

After the end of the talks, however, many top negotiators refrained from blaming each other for the poor outcome and instead they all expressed deep regret over the failure.

EU trade chief Peter Mandelson said the unsuccessful outcome is due to "collective failure."

Nath, a key player for developing countries, told reporters, "My confidence and my country's confidence in the institution of the WTO and the multilateral system remain intact."

The Indian minister said WTO members will be able to pick up all the efforts that have been put in by them in the past week in the future.

Lamy refused to elaborate on when WTO members would be able to work together for the successful completion of the Doha Round.

"We will need to let the dust settle," he said. "It is probably difficult to look too far into the future at this point."

But he said he will not "throw in the towel."

The European Union's Mandelson said, "I don't think there is any realistic chance of modalities being agreed this year or in the foreseeable future."

"That's a source of profound regret," Mandelson said, adding that what WTO members have to do now is to limit the damage as much as possible for future negotiations.

Brazilian Foreign Minister Celso Amorim and many other delegates shared the same view with Mandelson as the political landscapes in Brazil, the European Union and India are expected to change in the next year or year after.

The Doha Round talks, launched in the Qatari capital in November 2001, have long been stalled due mainly to a rift between rich and poorer countries on the core issues of farm and industrial sectors.

The key ministerial meeting of more than 30 top negotiators was originally set to run for six days through last Saturday.

Before the emergence of the tensions, the delegates were saying they expected to formalize a deal on the modalities as early as Wednesday.

Without the failure, the world could have saved more than $130 billion a year just through lower tariffs, according to Lamy.

Copyright ? 2008 Kyodo News International, Inc.

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