The seven-year old Doha round of World Trade negations, which was begun on November 2001, is likely to end now, as its two crucial participants: India and China have walked out from the talk over not harmonizing the rich nations’ proposal of farm imports.
Both India and China in World Trade Organisation (WTO) meeting in Geneva refused to bow down under United States’ pressure on the issue of giving permission to enter the agricultural markets in the developing nations.
India and China, the two fastest and largest emerging powers were asking to add the special safeguard mechanism (SSM) clause in the agricultural proposal to protect the interests of the millions of poor farmers of the developing countries. The negotiation broke on determining the threshold point of agriculture imports as India and China wanted the SSM to kick off at a lower import surge level while US and EU wanted it to take effect at a higher rate so as not to hurt exporters.
US was willing to set the trigger at a 40% jump in farm imports while India and China were firm at a 10% increase. India and China have lowered their tariffs on industrial goods, in exchange for European and American tariff and subsidy cuts on farm products.
However, Pascal Lamy, the Director General of WTO tried his best to bridge the difference between the rich and poor nations but could not succeed to proceed ahead. He had proposed the cap of US farm subsidies at USD14.5-billion annually, which US had later raised to USD15-bn. Brazil had approved it but China choked. However, Pascal still believes that the trade has not ended so far and can continue after some time.
“The failure by trade ministers from 30 countries to seal a deal on the world trade talks does not mean the end of the Doha Round of negotiations, which has been going on for more than seven years,” said Lamy.
In a release at Geneva, Pascal said, “We will need to let the dust settle. It is probably difficult to look too far into the future at this point. WTO members will need to have a sober look at it and how they bring the pieces back together.”
Union Trade and Commerce Minister of India Kamal Nath, who was there for negotiations has regretted, “It's unfortunate that in a development round, we could not agree to an issue of livelihood and security. G33 and the developing countries are concerned about the issues which affect the poor and farmers.”
Brazil, another strong representative from developing nations in WTO talk has said that it was unbelievable that we failed on one issue. However, this matter was crucial but we could have taken up other issues also. “This was a collective failure and we should change the players in the team.” said Brazilian Foreign Minister Celso Amorim.
US and EU have blamed India and China for their failure of fifth round of Doha talk. “The breakdown of these talks is bad news for the world's businesses, workers, farmers and most importantly the poor,” said Tom Donohue, the President and Chief Executive of Chamber of Commerce in a statement.
“They missed an opportunity to show leadership as key players in the global trading system. The real losers are the poorest countries, whose citizens understand that expanding trade is the right path toward growth,” added Donohue.
Since the begging of this talk, India was saying, “India can move out from the talk if US does not amend SSM which favours only rich nations while it is the matter of starvation of farmers of the poor nations”.
The demanding SSM is a set of norms which would allow developing nations to hike the tariffs on key crops such as cotton, sugar and rice if there were a sudden rush in imports, but US and EU wanted to hike the crop import and cut in tariff.
“In the face of the global food crisis, it is unconscionable that this came down to how much countries could raise their barriers to imports of food,” US trade representative Susan Schwab said.
The WTO talk in Geneva were at the edge of breaking last weekend but suddenly got some breath due to a draft proposal of Pascal Lamy was circulated among the G33 nations and was accepted by all.
But, now after the rebuff of India and China, mini-ministerial round of Doha Trade is looking at the end third year in a row. Before this, the full-scale ministerial meeting was ended in an impasse in 2003 when talks broke down on the last day at Cancun in Mexico.
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