Global Trade Talks Break Down Over Farm Issues

Global Trade Talks Break Down Over Farm Issues

By TOM WRIGHT and STEVEN R. WEISMAN
Published: July 24, 2006
New York Times

GENEVA, July 24 — Negotiations aimed at reaching a new global trade agreement collapsed today, dealing a blow to the Bush administration’s international economic agenda and touching off a bitter new round of recriminations between the United States and Europe over farm trade barriers.

After two days of discussions, the director general of the World Trade Organization, Pascal Lamy, formally suspended the talks. American trade officials said there appeared to be little prospect of resuming the talks any time soon, probably dooming the chances of a trade accord during President Bush’s remaining time in office.

Negotiators had earlier said that if the outlines of an agreement were not secured by late this month, it would be nearly impossible to negotiate a trade-expanding agreement in time for the United States Congress to vote on it by the middle of next year. President Bush’s authority to negotiate a trade deal and have it put to an up-or-down vote without amendment in Congress expires then.

The failure of the talks was particularly embarrassing because, just last month at a summit in St. Petersburg, Russia, President Bush and other world leaders all called for a redoubled effort to make concessions and break the impasse that has paralyzed trade talks for years.

The two top American negotiators in Geneva — Susan C. Schwab, the United States Trade Representative, and Mike Johanns, the Agriculture Secretary — said they were deeply disappointed by the suspension of the talks, but they recognized that Mr. Lamy had no choice, because there had been no convergence among the parties.

“Unless we figure out how to move forward from here, we will have missed a unique opportunity to help developing countries and to spur economic growth,” Ms. Schwab said. “There was no package on the table that we could have recommended to the President or to the United States Congress.”

Ms. Schwab and Mr. Johanns said that they came to Geneva prepared to make further concessions on agriculture tariffs and what are called trade-distorting subsidies, which protect farmers from overseas competition, but they said that the European Union and some developing countries failed to make similar offers.

Ms. Schwab said in a telephone conference call with reporters that when American officials added up the latest European market-access proposals for farm products, “it became quite clear that there was no there there.”
Mr. Johanns added: “There are no negotiations planned in the future. This round has been suspended.”

But European negotiators declared that it was the United States that had been intransigent. They said that the Americans failed to recognize that the European Union had gone through a series of painful cuts in tariffs and subsidies for their own farmers, and had not matched those steps with fresh concessions.

“Unfortunately the Americans were not able or willing to do their part,” said Peter Mandelson, the chief European Union negotiator. “They preferred to stand still.”

The latest round of global trade negotiations has been sputtering almost since it was begun in 2001 in the city of Doha in Qatar. At the outset, negotiators were hoping to make the talks a centerpiece of the wealthy industrial countries’ commitment to helping the poor countries of the world expand their exports.

The talks became known as the “Doha Development Round” because of their focus on alleviating poverty in countries with goods to sell to Europe, the United States and other wealthy parts of the world. In all, 149 countries were involved in the negotiations, but they tended to be break into blocs of countries with similar interests.

In theory, the wealthy countries were hoping to gain greater access to poorer countries for their manufactured goods and some services, like insurance, in exchange for allowing the poorer countries to export more easily to them.
But the talks foundered over barriers to agricultural trade, not only in Europe and the United States but also among the “top tier” of advanced developing countries, like India and Brazil, which have resisted farm imports because of widespread disquiet among their farmers. This summer, for example, some Indian farmers have publicly committed suicide over their inability to sell their produce at high prices.

Most of the tension was was between Europe and the United States, however. Last October, the Bush administration proposed a sweeping set of cuts in both tariffs and subsidies and called on the Europeans to do the same. The Europeans responded with a package of cuts that the United States deemed insufficient.

Trade deals have a history of rough going in Congress, and the Bush administration concluded that it could not get approval for a trade deal unless American farmers could be certain that they could win much greater access for their products in Europe and in India, China and other countries.

The United States offered to cut spending on farm subsidies to $19.7 billion from $47.9 billion now. But European officialss said that those figures were misleading and that the United States offer was actually much smaller than that.

President Jacques Chirac of France said about a week ago that the European would not consider further concessions unless the United States agreed to still deeper cuts in farm subsidies.

After the Group of 8 summit in St. Petersburg, Russia, Mr. Lamy held what American officials said was a “confessional” round of talks, in which he asked each party to “confess” privately what it would offer hypothetically if other parties were more forthcoming in their concessions.

The Bush administration was stymied, American officials acknowledged, because the farm bloc in the United States had become so distrustful of other nations’ protectionist practices that they told American officials they could not support a trade deal that did not win them much greater market access.
In June, 57 senators from both parties wrote to President Bush, demanding that the United States make no further offers to lower American barriers until further changes came from Europe.

“An unbalanced proposal that asks U.S. agriculture and rural communities to give more while getting less in market access is unacceptable,” the senators said.

Farm organizations sent the president a similar letter.

Trade officials said these letters reflected the political reality in the United States: that a trade deal would not be approved by lawmakers if it was what they called a “Doha lite” accord, with only limited lowering of barriers on all sides.

Ms. Schwab said today that despite those political constraints, she and Mr. Johanns came to Geneva over the weekend and told Mr. Lamy privately what the United States would do if the Europeans were more forthcoming.

Though only Mr. Lamy knew all the details of what the United States and the Europeans had offered, Ms. Schwab said, it was clear that the gap between the two sides was so great that continuing the talks would be futile.

“When we talked to Lamy yesterday, as things started getting pretty rocky, he acknowledged that it would not be useful for the U.S. to put its flexibilities on the table at this point, because they would be pocketed and there would