Trade talks among the World Trade Organisation’s (WTO) four most powerful members have failed because of their inability to agree on farm subsidy cuts, Brazilian Foreign Minister Celso Amorim said on Thursday.
”It was useless to continue the discussions based on the numbers that were on the table,” Amorim said at a news conference.
The talks had been described as crucial in the WTO’s drive to complete a new global trade pact by the end of the year.
”It is a setback, let us not hide it,” Amorim said.
The current round of global talks aims to add billions of dollars to the world economy and lift millions of people out of poverty through new trade flows.
But negotiations have struggled since their inception six years ago, largely because of wrangling between rich and poor countries over eliminating barriers to agricultural trade.
Indian Trade Minister Kamal Nath blamed United States unwillingness to cut its farm subsidies as the reason for the collapse of the talks.
Officials with knowledge of what happened in the talks said earlier this week that the US indicated it was willing to limit its trade-distorting farm subsidies to $17-billion. Brazil is insisting on a figure somewhere below $15-billion, according to the officials.
The issue of farm tariffs is politically charged in a number of European countries, particularly France. Critics of the subsidies say they unfairly deflate international prices, making it impossible for poorer nations to develop their economies by selling their agricultural produce abroad.
On Wednesday, officials said that the EU showed flexibility on the sensitive topic of farm tariffs, but that India held firm in defending its agricultural sector from foreign competition.
The EU denied that it had shifted its position in the talks.
Brazil and India also presented positions on easing access to their industrial markets, which were still far away from US and EU demands, according to officials present in the meetings on Wednesday.
They spoke on condition of anonymity because of the sensitivity of the negotiations and restrictions on talking to the press, which were set in response to leaked reports of Tuesday’s discussions.
Washington has demanded that Brussels and major developing countries provide greater market access for American farm exports in exchange for the subsidy cuts.
An official present at the talks on Wednesday said the EU indicated its willingness to cut tariffs on its most protected farm products by 70% — or 10 percentage points higher than in its official agriculture proposal from October 2005.
Those deemed especially sensitive by the EU — possibly including dairy, beef or poultry products — would only be required to make one-third of that cut, or 23,3%, the official said.
The offer would still fall short of what the US has previously demanded.
While the EU showed some flexibility, India took a tougher stance on the farm products it believes should be spared from foreign competition under an accord, according to an official at the meeting.
India insisted that 20% of its farm tariffs face no or only minimal cuts, the official said. US Agriculture Secretary Mike Johanns has previously said such an outcome would shield up to 95% of what India imports from cuts.
Another official present at the meeting denied that any specific figures were cited in the discussion of India’s ”special products”.
The four powers do not have a mandate to negotiate on behalf of the all of the WTO’s 150 members, but as their positions cover the range of positions in the Geneva-based commerce body, agreement by them on some of the outstanding farm trade and manufacturing questions was seen as a key test of whether an overall trade deal can be reached. — Sapa-AP