Info Service on Trade and WTO Issues (Aug08/05)
please find an article in The Star (
Why WTO talks collapsed
the most widespread view, the
the collapse of the World Trade Organisation’s mini-Ministerial talks
They are still recovering from the shock of the breakdown of the talks that took place on July 29 after a roller-coaster nine days.
Many delegates expressed regret at the failure. Malaysia’s representative to the WTO Ambassador Muhamad Noor Yacob said he was disappointed because it meant an opportunity lost for reducing the developed countries’ agricultural subsidies, and also because Malaysia would have had more export opportunities if the tariffs were reduced.
some 40 ministers were invited to the talks, most of the negotiations
were conducted by only seven ministers (from the
had been made on a number of issues, but on several of the key issues
the talks had been stuck. A compromise draft by Lamy to the G7 had a
fragile status, with
Meanwhile, frustration was building up among the 30 or more non-G7 Ministers who were specially invited by Lamy to the WTO, only to find themselves waiting for days on the wayside, while the G7 met.
the end came, the
The SSM would allow them to raise tariffs above the bound rate if import prices of agricultural products fall below or the volume rises above certain levels.
US Trade Representative Susan Schwab tried to take the high ground by
proclaiming that it was preserving the past 30 years’ gains of the trading
system from the protectionists led by
was part of a concerted attempt by the
Insiders at the G7 meeting were surprised at the tenacity of Schwab in insisting on an unreasonably high trigger of 150% (of the base import volume) before the SSM could be allowed to raise duties above the bound levels prevailing now.
tried to break the SSM deadlock by proposing a new draft, but this was
rejected by the
ministers and diplomats are speculating that the SSM was not the real
issue that was irreconcilable. In the most widespread view, the
The 2008 US Farm Bill having planned that cotton subsidies be maintained or increased in the next five years, it would have been difficult or impossible for Schwab to offer a plus 70% cotton subsidy cut.
a good cut in subsidies,
failure of the WTO talks would then have been placed squarely on the
This suspicion that the United States wanted to avoid the cotton embarrassment is the backdrop to the comments made by several ministers of developing countries in their press conferences that SSM could not have been the real cause of the talks breaking down, but rather the scapegoat picked on by a major player to shift the blame on to another issue and on other countries.
all, despite Schwab’s portrayal of the protectionist potential of the
As Indonesian Trade Minister Mari Pangestu, who led the fight for the SSM, put it: “It is like accusing us of a crime that we did not commit.”
the dust settles, the diplomats and secretariat officials remaining
will happen when the WTO comes back from its August break? No one can
tell. The speculation is that some meetings will continue. But the spirit
is gone from the talks, because the
expectation is that nothing can happen until the new
It could be difficult for the WTO talks to re-start on the same basis as before, and they could just fade away. But the WTO and its on-off talks have been resilient in the past. Who knows, the off button may switch to “on” again one day.