The World Trade Organization's Doha Round negotiations have collapsed once again after delegations from Brazil and India walked out of talks with the European Union and the United States in Potsdam, Germany.
The action by the two “developing” countries may have put the final nails in the coffin for the Doha Round, which began in Doha, Qatar, more than six years ago. Observers had been hopeful the talks between the so-called G-4 countries could help restart the round.
U.S. officials in Potsdam said they were disappointed by the decision of Brazilian Foreign Minister Celso Amorim and Indian Commerce Minister Kamal Nath to lead their delegations out of the talks.
“We came this week with the commitment to make significant progress towards a successful round,” U.S. Trade Representative Susan Schwab and Agriculture Secretary Mike Johanns said in a statement. “Unfortunately, the negotiations could not generate political consensus to open markets to new trade — particularly in manufactured goods.”
Despite the gloomy outlook, U.S. officials in Potsdam and WTO Director-General Pascal Lamy in Geneva tried to put a good face on the events and insisted a deal was still possible.
Lamy said convergence on the issues among the world's largest developed and developing countries — Brazil, India, the EU and the United States — would have been helpful, but it was not indispensable to a new trade agreement.
Although Lamy appeared unwilling to throw in the towel, leaders of the agriculture committees in the U.S. Congress seemed to consider the collapse the end of the line for the negotiations.
“I am very disappointed that discussion among trade ministers from these countries broke down, particularly since it now looks unlikely that an agreement will be reached any time soon,” said Sen. Tom Harkin, D-Iowa, chairman of the Senate Agriculture Committee.
“It is crucial that the U.S. proposal in domestic agricultural support be matched by similar improvements in offers from our trading partners in market access and export competition. We should have seen more willingness to match the U.S. offer, but we did not see it.”
House Agriculture Committee Chairman Collin Peterson, D-Minn., led off his weekly telephone conference call with the news that the talks had collapsed. “It sounds to me like the talks are officially over,” he said. “It was reported to me that Brazil and India walked away from the table, and there was no meaningful market access offered.”
Those comments seemed to conflict with reports that the Brazilian and Indian ministers walked away from the talks rather than agree to increased market access for industrial goods. Reports said the four countries had made progress on the agricultural issues in the negotiations.
The latter led the National Cotton Council and other farm groups to issue a press release expressing concern that U.S. farmers could be damaged by the talks in Germany.
The Cotton Council said the Doha Round negotiations are headed down a path that will “practically ensure an inequitable and unfair outcome for the U.S. cotton industry,” in a letter sent by NCC President and CEO Mark Lange to Ambassador Schwab.
“The agricultural negotiations appear to be taking a track that leads to far more specificity in policy provisions than is desirable,” said Lange. “Not only do the negotiations appear to be further increasing the reduction in support beyond the U.S. proposal but are adding ill-conceived commodity specific caps.”
Lange said the Council was particularly concerned about the West African C-4 cotton proposal, which would require additional commitments from cotton. Numerous articles have accused U.S. producers of impoverishing cotton farmers in the four countries — Benin, Burkina Faso, Chad and Mali.
“We have provided a great deal of information demonstrating clearly that eliminating U.S. cotton subsidies will not provide a solution for the economic plight of West African cotton producers,” the letter stated. “Similar evidence has been presented to the C-4 by disinterested third parties. This evidence has failed to move this debate onto a different, productive path.”
The letter said the NCC also was uncertain of the U.S. strategy to protect U.S. cotton from an unfair and inequitable Doha Agreement, noting that the United States has never offered any alternative to the C-4 cotton proposal despite a NCC request in February 2006.
“We are very concerned if that strategy hinges on simply convincing the C-4 countries to agree to be reasonable during the modalities stage of the negotiations,” the letter stated. “What happened in Geneva in 2004 and Hong Kong in 2005 is about to happen again — the C-4 countries are clearly positioned to block the Doha Round unless their demands are met.
“If, in fact, the draft modalities to be issued by (WTO Agricultural Committee) Chairman Crawford Falconer contain the C-4 cotton proposal, the U.S. cotton industry will have no choice but to re-evaluate its position on this negotiation and on a possible extension of trade promotion authority.”
The other areas of concern focused on commodity specific limits, market access and the lack of progress on a request from the U.S. textile industry for a sectoral negotiation on textiles.
In a later statement, National Cotton Council Chairman John Pucheu commended USTR Ambassador Schwab and Secretary Johanns for their continuing efforts to obtain an ambitious and balanced Doha agreement.
“Market access gains commensurate with reductions in domestic support are critical for a successful completion of the agricultural negotiations,” Pucheu said. “It is encouraging that U.S. negotiators have held to the principles of the U.S. proposal.”