WTO talks in “dire straits” according to director general Pascal Lamy

By Brendan Smith
brendansmith@transworldnews.com

From its inception five years ago in Qatar’s capital city Doha the world’s six major powers involved in agricultural trade have been at odds. With the latest rounds of talks being suspended, the World Trade Organization’s reputation has been dealt another blow and hope for its dispute settlement system is in shambles.

Designed to promote a global economic growth and eradicate protectionist trade barriers, the WTO now finds itself fighting for its life. The dagger that could strike the fatal blow appears poised to slice a global trade agreement and trigger bilateral deals. Blaming countries inabilities to settle differences concerning agriculture, WTO director general Pascal Lamy appeared less than optimistic about reaching a deal. Lamy called for a “serious reflection by participants which is clearly necessary.”

Entering into these talks held in Geneva, members of the world’s biggest economies had pledged to give their negotiators the flexibility needed to reach a compromise deal. The flexibility granted did not seem enough to bridge the gap between differences in respect to farm subsidies.

After Lamy formally suspended the Doha talks blame was quickly assigned. European Union Trade Commissioner Peter Mandelson called the U.S. “unwilling to accept, or indeed to acknowledge, the flexibility being shown by others in the room.” The Agricultural Commissioner of the EU, Mariann Fischer Boel, claimed they were  willing “to walk the extra mile if a final deal was within reach. Unfortunately, the US preferred to stand still.”

The U.S. was criticized for an unwillingness to cut billions of dollars in trade subsidies paid out to farmers. A refusal Mandelson jumped on, “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.”

U.S. Trade Representative Susan Schwab pointed out that Washington would have been willing to make further offers on farm subsidy cuts had the EU and India lowered tariffs to let U.S. farmers export more. The U.S. also called India and Brazil inflexible on lessening the barriers for industrial imports.

The complete breakdown in talks could further cripple poorer nations. The U.S. and EU will be able to continue subsidizing their agricultural production which will result in dumping in poorer countries. This in turn will negatively impact local farmers who will be forced to sell at lower prices.

Setting up bilateral trade agreements will also place weaker nations at the mercy of the world powers. Without multilateral trade deals those poorer countries will be forced to accept unfavorable agreements or be completely left out.

When asked about the state of the talks India’s Trade and Industry Minister Kamal Nath said they were “somewhere between intensive care and the crematorium.”

A sentiment followed up by Lamy, “there are no winners and losers in this assembly. Today there are only losers.”

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