Trade power talks collapse, WTO round in doubt

Geneva, Jul 24: A global deal to free trade was in doubt today after talks by major trade powers to save the World Trade Organisation's Doha Round collapsed.

Ministers from the so-called G6 the United States, the European Union, Australia, Brazil, India and Japan had made a last ditch bid to overcome differences on reforming world farm trade, which lies at the heart of the round.

''The WTO negotiations are suspended,'' Indian Commerce and Industry Minister Kamal Nath told journalists. When asked how long the suspension could last, he replied: ''Anywhere from months to years,'' he said.

WTO Director General Pascal Lamy told the G6 yesterday he would halt the Doha Development Agenda launched in 2001 to ease poverty and boost the global economy without a quick end to the deadlock, diplomats said earlier.

But 14 hours of talks yielded no breakthrough yesterday and ministers were meeting again today not to negotiate but to discuss what the next steps should be, diplomats said.

Lamy, who chaired the talks, called a meeting of the full 149-state WTO membership for later today.

The crisis recalled a similar breakdown in 1990 during the previous round of free trade negotiations the Uruguay Round.

That round, launched in 1986, was only finished in 1993.

Yesterday's negotiations failed to make progress in the key area of farm subsidies, known as domestic support, where the United States is under pressure to make further concessions.

DISAPPOINTED

Brazilian Foreign Minister Celso Amorim said he was ''disappointed and concerned'' and said ''of course there is always a risk of some unravelling'' of the progress achieved in the negotiations to date.

''The silver lining is that all those who spoke continue to be committed,'' he said.

The United States said that the EU and other WTO members that it calls ''protectionist'' had not done enough to lower farm tariff barriers to allow it to move further on subsidies.

''We won't give up ... (but) unfortunately it became clear that a 'Doha Light' is the preferred option of some,'' said US Trade Representative Susan Schwab ahead of tomorrow final meeting.

Diplomats have said failure by the six, who have already made several ''last ditch'' bids for a deal, would leave the 149-state WTO without enough time to complete the complex details of a global free trade treaty by the end of the year.

The end-year deadline for concluding the Doha round has been dictated by the 2007 expiry of special US presidential powers to negotiate on trade.

The round has been billed as a once-in-a-generation chance to boost global growth and lift millions out of poverty.

The G6 countries account for some three quarters of world trade and represent a wide range of commercial interests.

Washington says its offer to reduce subsidy limits by 60 per cent is significant but trade rivals argue the cuts leave real spending unaffected.

Diplomats said that EU Trade Chief Peter Mandelson spelt out how close Brussels could get to the level of tariff and subsidy cuts demanded by developing countries. ''But that was not enough for the US,'' said another diplomat from a country involved.

The big developing states have been far from accepting the sort of cuts in manufacturing tariffs demanded by the rich nations and say the farm question must be addressed first.

REUTERS