Promised WTO breakthrough fails to materialize

Trade ministers ended talks aimed at overhauling farm subsidies and import tariffs without reaching a deal this week. The United States blamed the EU for the failure, while European trade commissioner Peter Mandelson said that Europe was unwilling to act alone. Disagreement and intransigence are de rigeur at the WTO, but hopes were raised on Monday that a breakthrough on global tariffs and trade as imminent. The US's commitment to cut domestic farm subsidies by 60 percent within a five-year timeframe was seen as vital in revitalizing the WTO negotiations, "breaking the deadlock in multilateral talks on agriculture, and unleashing the full potential of the Doha Round," in the words of US trade envoy Robert Portman. Farm subsidies have been widely considered to be a major hurdle in obtaining a Doha Round agreement on global agriculture and services, and US reluctance to concede much ground has stonewalled any possibility of real change. But the momentum has not been kept up this week. In its proposal, the United States asked Europe to agree to reduce tariffs on farm imports by 55 percent to 90 percent. But because the European Union imposes higher import tariffs than the United States, it argued that such a move would disproportionately hit European farmers. Portman has already expressed frustration. "I'm disappointed because we haven't seen much progress on market access," he told the UK's Financial Times. "Time is running out." Europe faces a number internal pressures that could put a made a firm commitment out of reach. France's trade minister accused Mandelson this week of overstepping his mandate. But the US also faces heavy opposition at home. In open letter this week to USDA secretary Mike Johanns, Senate agricultural committee chairman Saxby Chambliss expressed his "concern regarding proposals… that would dramatically reduce US farm support." And there is growing concern among some developing countries - mostly African and Caribbean - that they will gain little from the Doha round. The US, EU, Brazil, India and Australia intend to meet in Geneva next week in an effort to stave off pessimism and push the Doha round of talks forward. In any case, trade ministers will aim to conclude negotiations on the WTO global trade agreement on agriculture and services in Hong Kong this December. The negotiators have already missed their initial deadline of 1 January 2005 for a final agreement on the Doha Round, which began in 2001. And despite the start-stop nature of this week's talks, WTO director-general Pascal Lamy, believes that these negotiations have gained "a new momentum" . "The new momentum has come firstly from the important proposal on domestic support made by the United States," he said. "I think all participants, whatever their positions, recognize this as an important contribution to advancing the negotiations."

Promised WTO breakthrough fails to materialize

The week started with the US making a firm commitment to cut domestic farm subsidies but ended in disappointment at the WTO. Politics as normal, or is an agreement doomed?

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