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WTO Talks End Without Agreement

by Ulrika Lomas, Tax-News.com, Brussels

31 July 2008


WTO Director-General Pascal Lamy announced on Tuesday that ministers attending trade talks in Geneva had failed in their efforts to agree on blueprint agreements in agriculture and industrial products.

He told a press conference after speaking to members that out of a to-do list of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th — the special safeguard mechanism for developing countries.

According to Mr Lamy, some countries wanted a high “trigger” (a large import surge needed to trigger the tariff increase) in order to avoid the safeguard being triggered by normal trade growth, while others wanted a lower trigger so that the safeguard could be easier to use and more useful.

“After more than 36 hours trying to find bridges between these two positions, today it became clear that the differences were irreconcilable. The remaining issues, including cotton, were not even negotiated,” he explained.

Mr Lamy announced that he would be calling a formal meeting of the Trade Negotiations Committee the following day for members to comment but he suggested that they should wait for the “dust to settle” before deciding how to move ahead.

“It is no use beating around the bush. This meeting has collapsed. Members have not been able to bridge their differences,” he told reporters.

The failure of the talks does not mean the end of the Doha Round, according to the WTO Director General. Mr Lamy told an informal meeting of the Trade Negotiations Committee that he remains convinced that what is on the table represents twice or three times more than has been achieved in any previous multilateral trade negotiation. Much was achieved in these meetings, he observed.

Expressing disappointment, the WTO chief gave a rough estimate of the economic cost of the failure, suggesting that:

“What members have let slip through their fingers is a package worth more than USD130bn in tariff saving annually by the end of the implementation period, with USD35bn saving in agriculture and USD95bn in industrial goods."

“With developing countries contributing one third and benefiting from two thirds of the overall gains [this would be] a true development round … with a rebalancing of the rules of the trading system in favour of developing countries.”

Looking to the future, he announced that:

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

“This is certainly not going to strengthen the multilateral trading system; it will not improve the system which has provided all its members an insurance policy against protectionism over the last 60 years."

“But I hope the system is resilient and will be able to resist the bumpy road ahead of us."

“For my part I will continue to serve this organization and its members as best as I can and devote my efforts to a fairer trading system.”


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