WASHINGTON—Global negotiations to expand trade and boost the fortunes of the developing world officially collapsed Monday, with the United States, Europe and Japan blaming one another and poorer nations complaining that they were the victims of protectionist interest groups.
Pascal Lamy, the head of the World Trade Organization (WTO), which regulates trade among 149 member nations, announced the collapse in Geneva, Switzerland, after meeting with trade chiefs from Australia, Brazil, the European Union, India, Japan and the United States.
"Today, there are only losers," Lamy told the trade ministers, indefinitely breaking off the so-called Doha round of talks that began in 2001. The failure of the talks would be a blow to poorer nations, where international trade is the best hope for stimulating economic growth and alleviating poverty, he said.
Experts warn that unless talks are quickly revived, the breakdown will widen the chasm between rich and poor nations. That could undermine U.S. efforts to promote democracy and free trade.
"High expectations and a breakdown could lead to recriminations between developing countries and richer countries," said Philippe de Pontet, an analyst with Eurasia Group, a political risk consultancy.
An 11th-hour deal appears unlikely. President Bush's authority to negotiate trade deals and put them to an up-or-down vote in Congress will expire on July 1, 2007, and a deal would have to be concluded this year in order to steer it through an increasingly protectionist Congress.
"At this stage of the game, we do not expect to be able to use the (trade-promotion) authority to enact the Doha agreement if and when one comes together," U.S. Trade Representative Susan Schwab said during a telephone news conference.
She blamed Europe for the collapse, and European Trade Commissioner Peter Mandelson fired back that Washington was to blame for providing almost $20 billion a year in subsidies to U.S. farmers.
The Doha round, named after the capital of Qatar, where talks began in 2001, was intended to open world markets to developing nations, particularly for their farm exports.
The failure to do so already has provoked a backlash across Latin America, where left-leaning governments have been elected or run strong by arguing that rather than making the world flatter, globalization and trade have benefited rich nations at the expense of poor ones.
Developing nations complain that Japan clung to triple-digit tariffs on rice and wheat; the United States stuck to costly farm subsidies; and Europeans sought to end-run negotiations by treating beef and other politically explosive products as "sensitive" and thus protected from foreign competition.
"This was the `development round,' an agenda for development, yet in the end, Europe and the United States were putting pressure on the developing world to liberalize their economies," said Rubens Barbosa, Brazil's ambassador to the United States from 1999 to 2004 and now an international trade expert in Sao Paulo.
Brazil and India weren't immune from criticism, however. They nearly scuttled the Doha round talks in 2003, and until Monday's collapse they opposed a ceiling of 20 percent on the tariffs, or taxes, that they levy on imported industrial goods.
"No deal is absolutely better than a bad deal," John Engler, the president of the National Association of Manufacturers, said in a statement that criticized Brazil and India for their lack of "meaningful cuts to their industrial barriers."
Since 1948, successive global agreements have expanded trade, leading to the creation in 1994 of the WTO. Since then, the world's exports have grown to more than $10.7 trillion last year from $4.3 trillion.
But the sensitive issue of farm exports has been punted from one negotiation to the next, and proved the undoing of the Doha round.
U.S. Trade Representative Schwab was unapologetic for the collapse, saying the Bush administration wouldn't accept a less-ambitious agenda.
"All the finger-pointing taking place is not going to alleviate poverty ... is not going to lift one family out of a destitute situation," she said. "It's just a way of moving on without dealing with the substance. And it's not the way we do business."
(c) 2006, McClatchy-Tribune Information Services.
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