Page last updated at 07:17 GMT, Tuesday, 25 July 2006 08:17 UK

Europe blames US for WTO failure

EU trade chief Peter Mandelson in Geneva
Mr Mandelson said he could not back the US proposals

EU Trade Commissioner Peter Mandelson has blamed the US for the collapse of the latest round of global trade talks.

US conditions attached to cutting farming subsidies were "unacceptable" for developing countries, he said.

But the US said it was "fully committed" to the talks and blamed Europe for its lack of ambition over reaching a deal to cut farming tariffs.

After assessing the situation, the World Trade Organization (WTO) decided no more talks should be attempted.

"We will certainly not conclude the round this year," WTO director general Pascal Lamy said.

That could mean even further delays to the so-called Doha round of talks which began in 2001.

'Missed opportunity'

Negotiators had been hoping for a deal this year before the special authority US President George W Bush has to negotiate trade deals expires, making it harder for him to win congressional approval for a treaty.

Mr Lamy warned that the richer members of the WTO must now keep the negotiation process going, saying: "We have missed a very important opportunity to prove that multilateralism works."

EU Commissioner Mandelson said he was "profoundly disappointed" that talks had stumbled, mainly as a result of America's inflexibility.

Farmer in India

"What they're saying is that for every dollar that they strip out of their trade-distorting farm subsidies they want to be given a dollar's worth of market access in developing country markets," he said.

"That is not acceptable to developing countries and it's a principle that I on Europe's behalf certainly couldn't sign up to either."

US trade representative Susan Schwab insisted the US remained "fully committed to multilateral trading system".

But she said that "a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions".

Meanwhile, Senator Charles Grassley, chairman of the Senate finance committee that would have to approve any trade deal, backed the stance of the US trade negotiators.

"I've always said that no deal is better than a bad deal, and a 'Doha light' deal would be a bad deal," he said.

"I'm glad our trade negotiators held their ground."

'Terrible blow'

The EU, US, Brazil, Australia, India and Japan have been negotiating a deal to boost world trade in industrial and agricultural goods.

The deal on the table would have caused great damage to developing countries
John Hilary
War on Want

Charity Christian Aid said that the collapse of talks struck "a terrible blow" for the world's poor.

It had removed the most important weapon in the fight against global poverty, the charity's senior trade analyst Dr Claire Melamed said.

But John Hilary, director of campaigns and policy at War on Want, said the collapse was good for the world's poor.

"Any chance of a genuinely pro-poor outcome was lost long ago, and the deal on the table would have caused great damage to developing countries," he said.

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