30 July 2008

Global Trade Talks End Without Breakthrough

USTR Schwab says good progress was made for the future

U.S. Trade Representative Susan Schwab talks with the press following the close of global trade talks in Geneva.

By Merle D. Kellerhals Jr.
Staff Writer

Washington -- Following nine days of intense global trade talks, negotiators deadlocked over farm subsidies and a safeguard mechanism designed to protect less developed economies, U.S. Trade Representative Susan Schwab says.

"While we made good progress during the past week, it is clear that despite our best efforts we will not be able to reach a breakthrough at this time," Schwab said at a July 29 briefing in Geneva where the World Trade Organization (WTO) talks were being held.  "To ensure that the advances we made this week are not lost, the United States will continue to stand by our current offers, but we maintain that they are still contingent on others coming forward with ambitious offers that will create new market access."

International trade negotiations have been held periodically for the past seven years with the goal of liberalizing global trade to make importing and exporting goods cheaper and easier, with a broader goal of improving the economies of developing countries.

Ultimately the Doha Development Round talks -- which began at the 2001 November WTO summit in Doha, Qatar -- are designed to strengthen the international trading system and lift millions out of poverty.  To reach a favorable conclusion, most of the 153 WTO members would have to cut subsidies or lower protective import tariffs to let in foreign goods.  While the talks began in 2001, there is no deadline for their completion.

"Regrettably, our negotiations deadlocked on the scope of a safeguard mechanism to remedy surges in imported agricultural products," Schwab said.  The safeguard mechanism was proposed to protect developing economies if they were suddenly confronted with a huge surge of cheaper imported goods.

"In the face of a global food price crisis, we simply could not agree to a result that would raise more barriers to world food trade," Schwab said.

The key point in the safeguard mechanism, she said, is that it must distinguish between a legitimate need to address an exceptional situation and extreme import surges, and a device that could be abused at will.

"This is a very painful failure and a real setback for the global economy when we really needed some good news," European Union Trade Commissioner Peter Mandelson told the Associated Press.

To help advance trade talks, the United States was prepared to reduce U.S. farm subsidies to $14.5 billion, Schwab said.  Currently, U.S. agriculture domestic support is more than $48 billion.  Efforts to reduce that amount were made in 2005 to $22.5 billion and then again more recently to $17 billion, she said.  On July 22, Schwab said the United States was willing to reduce subsidies to $15 billion to keep talks moving ahead.

"Throughout these negotiations, the United States has been strongly committed and willing to make the tough choices necessary to achieve an ambitious breakthrough," Schwab said.  "The United States remains committed to demonstrating the leadership necessary to achieve an ambitious result."

Schwab told reporters that the negotiations may have deadlocked for now, but the trade round is not over.