Page last updated at 18:57 GMT, Tuesday, 29 July 2008 19:57 UK

Q&A: Crunch trade talks

Rice grains
The talks have been going on for seven years

Finding a happy ending to marathon global trade talks was never going to be easy, as 153 countries tried to thrash out a deal in the face of global economic uncertainty.

And according to the World Trade Organization, efforts to liberalise global trade have "collapsed" without agreement.


How long had the talks been going on?

The world has been trying to reach a new deal to expand free trade since the Doha Development Agenda was launched with great fanfare in the Qatari capital in November 2001.

But progress has been very slow and little progress has been made after almost seven years of seemingly fruitless haggling.

Discussions have foundered over the extent of cuts to farm subsidies and how far trade in services such as banking and telecoms should be liberalised.

In the latest round of talks that collapsed on Wednesday, negotiators from more than 30 countries had hoped to inject fresh impetus into the process.

Why have the talks failed?

There seems little doubt the talks have collapsed - with officials saying that China, India and the US failing to agree on import rules was behind the stalemate.

The main stumbling block was farm import rules, which allow countries to protect poor farmers by imposing a tariff on certain goods in the event of a drop in prices or a surge in imports.

India, China and the US could not agree on the tariff threshold for such an event.

Washington said that the "safeguard clause" protecting developing nations from unrestricted imports had been set too low.

How will this affect world trade?

There will be no immediate impact on global trade flows given that the measures under discussion typically had implementation periods of up to 14 years.

Coffee workers in Rwanda
African countries have limited access to world markets

However, the failure does undermine the credibility of the multilateral trading system and will most likely lead to greater reliance on regional and bilateral trade agreements.

These are politically easier to negotiate but often put smaller and poorer countries at a disadvantage.

The failure to revive the talks also raises doubts about the ability of the international community to tackle other global issues such as climate change and soaring food and energy prices.

What does this mean for developing countries?

Some non-government organisations (NGOs) say that no deal is better outcome than a bad deal for the world's poorest countries.

Africa, the poorest continent on the planet, was not even represented in the inner circle of talks by the end.

However, a fair trade deal could have given poorer countries a chance to become less reliant on aid and to prevent worsening poverty.

Does this mean the Doha round is doomed?

With the failure of the talks, the next step for the Doha Round is not yet clear.

Global trade talks are likely to be put on back burner for the time being, especially with US elections in November.

"We will need to let the dust settle a bit," WTO chief Pascal Lamy said.

"It's probably difficult to look too far into the future at this point. WTO Members will need to have a sober look at if and how they bring the pieces back together."




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