Brazil Blames the US for Collapse of WTO Talks

The Doha Development Agenda negotiations are to be suspended because gaps between key players remain too wide. Heads of delegations, speaking in an informal meeting of the Trade Negotiations Committee on 24 July 2006, agreed with WTO Director-General Pascal Lamy that this will be a setback for all members.

Mr Lamy told heads of delegations in the informal meeting that he will recommend a "time out" to the General Council on 27 July. He did not suggest how long the talks will be suspended. They can only resume when progress can be made, which in turn will require changes in entrenched positions, he said. The suspension will apply to all negotiating groups.

"We have missed a very important opportunity to show that multilateralism works," Mr Lamy told a press conference afterwards.

"The feeling of frustration, regret and impatience was unanimously expressed by developing countries this afternoon."

Celso Amorim, Brazil’s Foreign Minister. didn’t seem too disappointed. He evaluated that the break in talks would last between two and six months.

Amorim also thinks that more commercial disputes will be taken now before the WTO even though he isn’t aware of any Brazilian complaint for the moment.

Even without mentioning the country by name, Amorim suggested that the United States should be blamed the most for the talks failure: "I will not fall in the temptation of looking for culprits but I need to admit that the area that most hindered the negotiations was the area of domestic subsidies."

Lamy did not say when the negotiations will resume but explained that movement towards a conclusion can only result from internal work within countries. "Now we have to think first at home," he told journalists.

Mr Lamy reached the conclusion to suspend the negotiations after talks among six major members broke down on Sunday 23 July. Ministers from Australia, Brazil, the European Union, India, Japan and the United States had met in Geneva to try to follow up on instructions from the St Petersburg Summit on 17 July.

The Geneva meeting was "lengthy and detailed – but at its conclusion, it remained clear that the gaps remain too wide," Mr Lamy told the full WTO membership.

The main blockage is in the two agriculture legs of the triangle of issues, market access and domestic support, he said. The six did not even move on to the third leg, non-agricultural market access, he observed.

He is therefore recommending the talks be suspended in all subjects across the round as whole to give members time to reflect: "Time out to review the situation, time out to examine available options and time out to review positions," he called it.

"In practical terms, this means that all work in all negotiating groups should now be suspended, and the same applies to the deadlines that various groups were facing," he went on.

"It also means that the progress made to date on the various elements of the negotiating agenda is put on hold, pending the resumption of the negotiations when the negotiating environment is right. Significant progress has been made in all areas of the negotiations, and we must try together to reduce the risk that it unravels."

Mr Lamy warned of the dangers: a possible lost opportunity to integrate more vulnerable members into international trade, "the best hope for growth and poverty alleviation"; a negative signal on the world economy with the possible resurgence of protectionism.

"If the political will really exists, there must be a way," he said. "But it is not here today. And let me be clear: there are no winners and losers in this assembly. Today there are only losers."

Stressing that movement has to come from the members themselves, Mr Lamy told them: "The ball is clearly in your court."

Members’ comments

Members shared the disappointment and frustration. Some blamed the deadlock on inadequate offers to make significant cuts in domestic support in agriculture. Some blamed it on market access offers that would not produce genuine increases in trade.

Some blamed it on rich countries’ demands for improved market access that would put subsistence farmers in poor countries at risk instead of the rich countries tackling the distortions of their own subsidies.

Several members said fingers should not be pointed at individual members, but that the responsibility for failure should be borne collectively by all members. Some argued that the gaps are not as wide as they appear.

Several developing countries said failure to conclude the round would deprive them of outcomes that would benefit development, from the reduction of agricultural distortions, to the duty-free, quota-free package for least-developed countries’ exports and "aid for trade".

The deadlock will be bad news particularly for cotton farmers, African countries said. They have been pressing for more ambitious reductions in distortions in the sector. More generally, these countries said they had unilaterally liberalized under programs of the World Bank and IMF only to face increases in subsidized imports from richer countries. They had hoped the negotiations would redress the balance.

"We realize we are now taken hostage by larger developed countries," one of them said.

Speakers stressed their commitment to preserving the multilateral system. One warned that some sections of public opinion, which do not understand the benefits, could celebrate the suspension. Another said the multilateral system is on trial. Others warned that disputes could increase.

Several were uncomfortable about the uncertainty. They called for a clearer picture in September, after the European summer break, of when and how work will resume.

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