After seven years of effort, international negotiations aimed at liberalizing global trade have collapsed in Geneva, with industrialized nations and developing countries blaming each other for the failure.

"This meeting has collapsed," Pascal Lamy, director-general of the World Trade Organization (WTO), said late on July 29. WTO "members have simply not been able to bridge their differences."

Since 2001, when the WTO launched its so-called Doha round of negotiations -- and until last night -- hope had prevailed that the organization's 153 members could strike a grand bargain on world trade.

In broad terms, the generous subsidies that many developed countries now offer their farmers would have been slashed. That could have opened up European and U.S. markets to produce from the developing world, potentially lifting millions of Third World farmers out of poverty.

Tariffs on industrial goods and services would also have been lowered, allowing European, North American, and Japanese businesses to gain greater market share in the developing world.

But it was not to be. Everyone is now seeking to blame the other side.

China's Xinhua state news agency blamed what it called the "selfish and short-sighted behavior" of unnamed developed nations for the talks' failure.

But the United States blamed China and India for insisting on protecting their farmers at all costs.

The U.S. Chamber of Commerce issued a statement noting both countries' rising global influence. It admonished them that "with great power comes great responsibility."

Japan joined the assault on Beijing and New Delhi, with government spokesman Nobutaka Michimura saying both countries needed "to take more responsibility."

France's agriculture minister, Michel Barmier, concurred. The big emerging countries," he said, were to blame for the lack of a deal.

Indian Commerce Minister Kamal Nath has called for the WTO to treat last night's lack of consensus as a "pause, not a breakdown."

WTO head Lamy, speaking to journalists, said he would leave it up to member nations to decide whether a trade deal could still be rescued, at some point in the future.

"We will need to let the dust settle a bit. It's probably difficult to look too far into the future at this point," he said. "WTO members will need to have a sober look at if and how they bring the pieces back together."

In the meantime, global trade will continue and countries are likely to press ahead with their own bilateral deals.

But it is clear the immediate losers are the ones who can least afford it: the world's poorest countries, especially in Africa, who had looked to a WTO deal to give their farmers access to new markets.

Many economists also fear that the failure of the Doha round will embolden protectionist calls in both the developing and industrialized world -- which could set off a chain reaction of tariff rises.

If that happens, Doha proponents say a global economic downturn will turn from a possibility to a certainty.

... Payvand News - 07/30/08 ...

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