The chance of a global trade deal shrank dramatically yesterday with talks between core negotiating partners collapsing again in division and acrimony, writes Mark Hennessy, Political Correspondent, in Brussels
In a near-exact repeat of events last summer, talks in Potsdam, Germany, between the four partners at the centre of the so-called Doha round of negotiations - the EU, US, Brazil and India - broke up with sides still far apart on cutting agricultural subsidies and goods tariffs.
The collapse makes it unlikely that an outline deal can be agreed before the summer, a step necessary to complete a detailed agreement by the end of the year.
Kamal Nath, the Indian trade minister, accused the rich countries of arrogance and inflexibility. "It is not just a question of figures. It is a question of attitude. The US does not realise that the world has changed".
The US and EU said Brazil and India offered no serious access to manufactured goods markets in return for proposed reductions in US farm subsidies and European agricultural tariffs.
The EU's refusal to meet demands by Brazil and India for bigger cuts in agricultural subsidies is based significantly on pressure from France and Ireland.
"The talks today did not collapse because of Ireland's position," said the Minister for Foreign Affairs Mr Dermot Ahern, last night. "We believe that the EU has offered a very reasonable position in relation to agriculture, particularly. There are other areas where there needs to be concessions from other participants who have not been as forthcoming".
The failure of the so-called G4 to broker an outline deal will throw the ball back to the entire membership of the World Trade Organisation in Geneva, where the chairmen of the farm and industrial goods talks are preparing draft versions of a deal.
Unlike last year's collapse, when the US found itself isolated, the EU yesterday joined the US in demanding bigger cuts in goods tariffs. Peter Mandelson, EU trade commissioner, told reporters: "It emerged from the discussion on [industrial goods] that we would not be able to point to any substantive or commercially meaningful changes in the tariffs of the emerging economies." He said Mr Nath unilaterally declared the talks over without consultation.
Mr Nath said the US was offering a ceiling of $17 billion (€12.6 billion) a year in farm subsidies, a reduction of $5 billion on its current offer, but way above the $12 billion that India and Brazil were demanding.
In return, he said, the EU and US asked for a ceiling of 18 per cent on industrial goods tariffs from developing countries. Brazil and India offered 30 per cent.
- (Additional reporting Financial Times service)
