Doha Round Collapses

by Ulrika Lomas, for LawAndTax-News.com, Brussels

25 July 2006

The World Trade Organization yesterday suspended its Doha Round talks after negotiations on farm trade subsidies failed to bridge major differences. Developing countries blamed Europe and the US while those two blamed each other.

After last-ditch talks in Geneva collapsed, Director General Pascal Lamy told heads of delegations in an 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.”

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.”

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