WTO Trade Talks Fail Amid Accusations and Recriminations

While negotiators from some of the 149 countries and WTO director general Pascal Lamy were working out the way ahead, EU Trade Commissioner Peter Mandelson warned of the huge cost of failure in the five year-old effort.

"We risk weakening the WTO and the multilateral trading system at a time when we urgently need to top up international confidence, not further damage it," Mandelson said after the collapse of a meeting of six influential WTO nations.

"As well as an economic cost, there is a huge political cost of failure," he told journalists.

In a report last week, the Organization of Economic Cooperation and Development (OECD) said progress at the WTO was "urgently needed" to "reinforce" crucial agricultural reform in some rich countries "and re-start it in others."

German Agriculture Minister Horst Seehofer said he was disappointed with the meeting's result.

"A historic chance to create fair rules for the trade of agricultural and industrial goods was missed," he said from Berlin. The EU delegation at the talks was responsible for representing Germany and the bloc's other member states.

Last year, under its then British presidency, the Group of Eight industrialized nations (G8) also pinpointed a WTO deal as a key plank in global efforts to eradicate poverty in the developing nations on top of massive aid package.

"You can give them four more months, give them four more years, give them four more centuries, but unless the EU and the US make fundamental changes to their offers then these talks will fail development," said Celine Charveriat of the international development charity Oxfam. "The potential for world trade to help poorer countries to develop will be lost."

Washington blamed for failure

Indian trade minister Kamal Nath blamed the United States for the collapse of the talks, saying Washington had not matched flexibility shown by the EU and other WTO nations on farm trade.

"I don't want to get into the blame game," he said. "But it's very clear that the EU made a movement. Everyone put something on the table except for one country, who said: 'We can't see anything on the table.'

"The round is not dead. But it's definitely between intensive care and the crematorium," Nath added. "This failure is a significant failure. The failure is inherently because of the gap in mind-sets. Unless we are able to bridge this gap, there is no future for this round."

The troubled effort to bring down agricultural and industrial barriers was dubbed the Doha Development Agenda when it was launched in the Qatari capital in 2001.

History shows perseverance works

It was proclaimed as a way to stimulate developing nations by allowing them to sell their produce more freely in wealthy countries and to stop rich nation subsidies distorting world prices.

Subsidy and tariff cuts in farming are a left over from previous failure to resolve the issues under the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), and the deal that led to the creation of the WTO in 1995.

"Even though today truly represents a failure, this is not the time to pull offers off the table, to talk about take it or leave it," US Secretary for Agriculture Mike Johanns said in Geneva. "If you look at the history of the Uruguay round, it stopped and started a number of times."

After missing the original deadline to complete the Doha Round by 2005, the international community had been counting on securing the outlines of deal this summer in order to complete it by the end of the 2006.

Expiring US power to add to problems

In July 2007, US President George W. Bush will lose his special "fast-track" trading authority, which allows the White House to make deals that can be either approved or rejected by Congress, but not amended.

Even though the EU and India were blaming Washington's allegedly inflexible stance on agriculture for the failure of Monday's meeting, the expiration of fast-track will make any global trade deal even harder to achieve in the future.

The US Congress, and the domestic US farming lobby, would have even greater leverage on Washington's stance on cuts to domestic support, or concessions from other countries, than they have now.

"The timeout has been called in the talks. That does not mean that it is not possible to pick up in the future," EU Agriculture Commissioner Marianne Fischer Boel said. "It is a big failure. If it's going to be definite, only time will tell. But at this stage it's difficult to see if there's a magic wand."