Global Policy Forum

Recriminations Fly After Trade Talks Failure


By Heather Stewart

July 30, 2008

India's trade minister, Kamal Nath, today accused the United States of putting the livelihoods of a billion of the world's poorest people against "commercial interests" as each country blamed the other for the acrimonious collapse of world trade talks in Geneva. As ministers from more than 30 countries prepared to leave the World Trade Organisation's Swiss headquarters after nine fruitless and exhausting days of negotiations, the bitter atmosphere between leading players underlined fears that the WTO's Doha round could take years to revive. Visibly angry, Nath told journalists: "The most important thing was the livelihood security, the vulnerability of poor farmers, which could not be traded off against the commercial interests of the developed countries." He said his position was supported by 100 countries, representing a billion subsistence farmers.

The talks — the latest attempt to complete the seven-year-long trade round — collapsed late yesterday, over India's insistence that developing countries must be able to protect their agricultural sector against sudden surges of subsidised imports from the US and EU. Susan Schwab, the US trade representative, said an outline agreement drafted by WTO director general Pascal Lamy on Friday night had been, "negotiated to within an inch of its life", and, "if you pulled one thread, you threatened to unravel the whole thing"."Every country in the room accepted it except one; subsequently, all of us showed flexibility except one," she added, in a clear jibe at India.

China, too, joined in the frenzy of finger-pointing, weighing in to support India. An editorial from the Chinese official news agency, Xinhua, lambasted the "selfishness and short-sighted behaviour" of wealthy nations for bringing down the negotiations at the 11th hour. Less powerful developing countries also expressed concern that key developments in the talks over the past week took place among an inner core of just seven major trading powers, as Lamy battled to secure agreement. "Mr Lamy invited around 30 ministers, and then we had just seven countries involved in the process," said a spokesman for the Indonesian delegation. "We understand that maybe at times you need to have small group meetings for detailed discussion, but when our interests are at stake they should invite us."

Some countries also expressed anger that a number of highly contentious issues, including America's controversial cotton subsidies, had not been brought to the table in Geneva. Burkina Faso's trade minister, Mamadou Sanou, warned that the cotton industry in his country faced ‘extinction'. "We can hardly control our anger," he said. "They wanted me to be here to negotiate on cotton. I have been here for 10 days and I haven't been able to discuss cotton. There is a risk that the whole system will collapse in our country." Many smaller countries are anxious they will now come under renewed pressure to sign generous bilateral trade agreements with rich countries, giving them less bargaining power than they can wield collectively within the WTO.

Amy Barry, trade analyst at Oxfam, said: "The breakdown is worrying because the WTO, for all its flaws, offers developing countries a forum in which their voices can at least in theory be heard. The concern is that in bilateral and regional deals they have much less clout and that if the WTO is discredited then countries like the US and EU will pay even less attention to its rules than they already do." However, some anti-poverty campaigners insisted that developing countries should breathe a sigh of relief that the talks had failed. "No deal is batter than a bad deal," said Aftab Alam Khan, head of trade policy at ActionAid, arguing that the US and EU had made too many demands. "This is just another example of the intransigence and insensitivity of rich countries, who aren't interested in the survival of small farmers, workers and jobs in developing countries."

Meanwhile business groups in the UK expressed disappointment that no deal had been clinched. Richard Lambert, director general of the CBI, said it was "a lost opportunity for the global economy.It is particularly disappointing that India was unwilling to compromise, and was a catalyst for the breakdown of the talks," he added. "The deal that was on the table offered promise for developing and developed countries alike."

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