Page last updated at 21:51 GMT, Tuesday, 29 July 2008 22:51 UK

Trade talks' failure ends Doha dreams

By David Loyn
International development correspondent, BBC News

There was no doubting the intensity of emotion on the faces of negotiators who had stared each other out over the past nine days.

Kenyan banana seller. File pic.
The failure leaves the global banana market in confusion

They had reached their bottom lines and had concluded agreements - until they came to item 18 out of 20 on the "to do" list being worked through by Pascal Lamy, the head of the World Trade Organization.

The issue where they could not bridge the gap was so-called special safeguard mechanisms - the ability of developing countries to impose temporary tariff barriers to control prices or block import surges - an insurance policy for hard times.

Describing himself "distressed" by the failure of the talks, Brazil's Foreign Minister Celso Amorim said it was "unbelievable that we failed on one issue".

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With the US on one side trying to prevent these barriers, and China and India on the other wanting to put them up, the talks hit what the EU's trade negotiator Peter Mandelson said was an "irresistible force meeting an immovable object".

His US counterpart, Susan Schwab, said the US "remained committed to the Doha round" and that it was "most unfortunate" that a deal could not be done.

Turning point

Given the context of rising fuel and food prices and economic uncertainty, it was perhaps not the best time to expect nations to take a leap of faith to open up their markets.

The talks saw an emerging new architecture in relations between world powers

They want the maximum ability to protect their own populations in an increasingly volatile world.

However, the problem is that liberalisation in world trade over recent decades has brought prosperity only to a minority of the population of the world, and without firmer guarantees many countries began to agree with the view that "no deal is better than a bad deal".

But it was not just the issue of special safeguard mechanisms that wrecked the round.

There has been no agreement on how to level trading terms for banana-exporting nations, while the concerns of African cotton-producing countries about US subsidies for its cotton farmers were not even addressed.

Pascal Lamy
Pascal Lamy said it would be developing countries that lost out

A passionate believer in trade as an instrument of development, Pascal Lamy told the BBC that it was developing countries that would lose out because of the collapse of the round.

He said he would try to restart talks and salvage something from the wreckage, but the political will for a deal has evaporated.

Geneva marked a historic turning point in more ways than one.

For the first time since World War II, the world turned its back on the process of liberalisation that has been the engine of the huge increase in trade in goods and services during the years of globalisation.

The talks also saw an emerging new architecture in relations between world powers, with alliances between China, India and Brazil more important than their relations with traditional Western countries.

After failure in Geneva it is hard to see how any life can be breathed into the corpse of a round of negotiations that was launched in Doha in 2001 with the hope of improving terms of trade for the developing world.

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


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