World trade talks suspended, maybe for years

GENEVA, July 24 (Reuters) Global free trade talks, billed as a once in a generation chance to boost growth and ease poverty, collapsed today after nearly five years of haggling and resuming them could take years.

The suspension of the World Trade Organisation's (WTO) Doha round came after major trading powers failed in 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 reporters. Asked how long the suspension could last, he said: ''Anywhere from months to years.'' The round, launched in the Qatari capital in 2001, stumbled from the start over how far rich nations would go to dismantle their huge farm subsidies and open up their markets.

Fourteen hours of talks between the so-called G6 -- the United States, the European Union, Brazil, Australia, Japan and India -- yielded no breakthrough yesterday despite warnings from WTO chief Pascal Lamy that he would call a halt to the negotiations without progress.

The European Union and India pointed the finger at the United States for the final breakdown, saying that Washington had been demanding too high a price for cutting into the some 20 billion dollars it spends annually on farm subsidies.

Accusing the United States of ''stone-walling,'' EU Trade Commissioner Peter Mandelson said: ''Surely the richest and strongest nation in the world, with the highest standards of living, can afford to give as well as take.'' But the United States was adamant neither the EU nor India had been prepared to offer the sort of access to their markets that Washington needs to make a deal on subsidies worthwhile.

It has said all along it preferred no deal to one that brought it no new business.

''Unfortunately as we went through the layers of loopholes ... we discovered that a couple of our trading partners were more interested in loopholes than they were in market access,'' said U.S. Trade Representative Susan Schwab.

MAINTAIN COMMITMENT Despite the debacle, all members of the G6 said they remained committed to the multilateral trading system and to completing the Doha round, even if they could not say how or when the negotiations could be revived.

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.

The 149-member WTO had been hoping to complete negotiations on the Doha round, which also includes complex issues such as services and anti-dumping rules, by the end of the year.

But the setback in Geneva left the round bereft of a target date and with a host of potentially complicating international events on the horizon, including several elections and expiry next year of US. presidential powers to negotiate trade deals.

Brazil's Foreign Minister said it was important for talks to resume as soon as possible and that progress made so far, including a pledge by the EU to end farm export subsidies, not be removed from the negotiating table.

''There is always a risk of some unravelling'' of the progress to date, said Celso Amorim. ''The silver lining is that all those who spoke continue to be committed (to the round).'' Mandelson said there was a political cost to the collapse of the talks, as well as an economic one.

''We risk weakening the WTO and the multilateral trading system at a time when we urgently need to top up international confidence, not further damage it,'' he said.

Non-governmental organisations had no doubt that the United States and the European Union were to blame, accusing the two economic superpowers of ignoring the needs of the world's poor.

The ''selfish intransigence of the US and Europe'' has wrecked any hope of a successful outcome,'' British-based Christian Aid said in a statement.

REUTERS MQA RK2235