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Last Updated: Tuesday, 25 July 2006, 00:01 GMT 01:01 UK
Lamy urges rethink for trade deal
WTO chief Pascal Lamy
Lamy has told WTO members not to blame others for the failure
Countries may have to re-examine their negotiating positions in order to revive free trade talks, the head of the World Trade Organisation has said.

Pascal Lamy made the comments after the latest batch of "last-ditch" talks to save a trade treaty collapsed.

Negotiations hit an impasse over a deal on agricultural subsidies and tariffs.

The US and Europe blamed each other for the failure. Brussels rapped America's inflexibility, while the US said Europe lacked ambition to reach a deal.

The WTO director general urged countries to "examine their position and review their positions" but to avoid blaming one another for the suspension.

"We will certainly not conclude the round this year," the WTO director general added.

That could mean even further delays to the so-called Doha round of talks which began in 2004.

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.

Major setback

"This is a serious setback, a major setback," Brazilian Foreign Minister Celso Amorim said of the breakdown in negotiations.

India's Trade Minister Kamal Nath added the development had left a trade deal "somewhere between intensive care and the crematorium".

I've always said that no deal is better than a bad deal, and a 'Doha light' deal would be a bad deal
Charles Grassley
US senator

EU Commissioner Mandelson also held out little hope they could be resurrected, saying many of the WTO's 149 members would have "lost a great deal of faith and confidence" in the process.

In the long run, the collapse of the talks would lead to less open markets and leave developing countries worse off, he added.

A deal tabled by the US demanding that for "each dollar stripped out of their trade-distorting farm subsidies they want to be given a dollar's worth of market access in developing country markets" was unacceptable, he explained.

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".

Held firm

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."

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

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

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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