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WTO talks fail; US, India reject compromise

A US dispute with China and India over farm import safeguards had effectively ended any hope of a breakthrough in the high-level World Trade Organization summit.

world Updated: Jul 29, 2008 22:53 IST

Trade officials said Tuesday that a high-level summit to salvage a global trade pact collapsed, after the United States, China and India failed to compromise on when poor countries could raise import tariffs on farm products.

Trade officials from two developed and one emerging country told The Associated Press that a meeting of seven commercial powers broke up without agreement at the World Trade Organization on Tuesday.

The officials, who demanded anonymity because the news was soon to be announced to a larger meeting of countries, said a US dispute with China and India over farm import safeguards had effectively ended any hope of a breakthrough.

Two officials said WTO chief Pascal Lamy had informed ministers that convergence could not be reached after nine days of talks that had aimed at a comprehensive deal aimed at lowering the tariffs and subsidies that hinder international trade.

The meeting had been working on a broad compromise that, in short, would have let poor countries sell more produce to rich countries while giving the developed world greater market access in developing countries for services and manufactured goods.

US Trade Representative Susan Schwab appeared downcast as she began to brief reporters. She said negotiators were "so close on Friday," but then stopped speaking. Asked if the entire Doha trade round was over, she said "I didn't say that" and walked away.

Negotiators were hoping for a deal this week on farm and industrial trade, so that crisis-ridden WTO talks could be saved. They were launched in 2001, but have repeatedly stalled amid deep divisions between rich and poor nations.

Some officials had described this meeting at the WTO's Geneva headquarters as a last chance for the trade round launched in Qatar's capital seven years ago, noting that U.S. and other national elections would make negotiations difficult over the next couple of years.

Without a final deal, Europe will not be required to open up its farm markets to emerging powers in Latin America and elsewhere.

Brazil, China, India and other fast-growing developing nations won't have to ease access to manufacturing imports from the rich world.

And the US will not have to make any tough decisions on the billions of dollars in farm subsidies it pays out each to American growers of cotton, soybean, rice and other staples.

The debate over farm subsidies has taken on added significance amid the recent spike in food prices around the world. Poorer nations say the payments distort global farm markets and hinder the development of sustainable agriculture in the Third World.

But talks over the last nine days had brought consensus on many of the challenging problems that scuttled major trade meetings in Cancun, Mexico, in 2003, and in Hong Kong two years later.

A number of trade officials described the debate pitting the United States against China and India as one of principle _ and not just hard economics. Others blamed a lack of courage for the standoff.

"It is a jump in the dark," Brazilian Foreign Minister Celso Amorim said before final efforts Tuesday. "You can't calculate until the very last situation all the hypotheses. If you do that (the round) will never finish. It will take two years, three years. It will probably be for a new generation."

The issue concerned a "special safeguard" developing countries led by China and India have demanded to deal with a sudden surge of imports or drop in prices.

While farm import safeguards currently exist in rich and poor countries, they are rarely used. The dispute over the current proposals concerns the threshold for when developing nations could sharply raise their tariffs, and how high those taxes could rise.

The United States had accused the two emerging powers of insisting on allowances to raise farm tariffs above even their current levels. That violates the spirit of the trade round, the US and other agricultural exporters argued, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.

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