WTO trade talks head for a stalemate

Now the fear is being voiced that failure to make progress toward an agreement could spell the end of the multilateral trade agreements that have formed a crucial component of the post-war economic order.

The EU has proposed tariff cuts on agricultural products averaging 40-45 percent while exempting some import sensitive commodities. But the US wants bigger cuts of between 55 and 90 percent with few exemptions for goods such as beef and dairy products.

In response, the EU has warned that it cannot go much further on agriculture because it is restricted by its Common Agricultural Policy (CAP), which has set limits on payments to farmers until 2013.

According to the EU trade ambassador to Washington, John Bruton: “Our limits—as far as how much we can go on market access—are set by the CAP reform program.” He said cuts in subsidies to domestic farmers, already agreed to by the EU, would be undermined if Europe agreed to lower tariffs because the consequent fall in prices would lead to increased payments to farmers.

The EU trade commissioner Peter Mandelson also emphasised there was little room for manoeuvre. But probable disappointment from the failure of the talks should not be put on Europe, he insisted. Europe was prepared to do business with others “if they are prepared to do business with us”. He accused the US, India and Brazil of not pulling their weight. “We would like Brazil and India to make firm and clear offers that create real market access for trade in industrial goods and services. Let’s have some offers on the table.”

On the other side, Christin Baker, the spokeswoman for US trade representative Rob Portman, said that without more progress on agriculture it would be difficult to secure agreement from developing countries to open their markets to manufactured goods and services—one of the European demands.

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http://www.wsws.org/articles/2005/dec2005/doha-d12.shtml