Germany Calls Global Trade Talk Breakdown a ″Missed Chance″ | Business | Economy and finance news from a German perspective | DW | 29.07.2008

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Germany Calls Global Trade Talk Breakdown a "Missed Chance"

Germany has reacted with disappointment at the collapse of global trade talks in Geneva, saying a new deal would have sent an important signal to the world economy at a time when it's beset with problems.

A banana trader

The failure has scuppered a deal between banana exporters in Latin America and the EU

After nine days of haggling and discussions, some 40 ministers were unable to reach a compromise agreement on lowering global trade barriers and opening up agricultural markets.

World Trade Organization (WTO) Chief Pascal Lamy said talks had collapsed because key powers were unable to bridge their differences on food tariffs.

"There is no use beating around the bush, this meeting has collapsed, members have simply not been able to bridge their differences," Lamy told journalists.

He said the 153 members of the WTO needed time to decide on how to proceed.

"We will need to let the dust settle a bit, it's probably difficult to look too far into the future at this point," he said. "WTO members will need to have a sober look at if and how they bring the pieces back together," he added.

Germany voices deep disappointment

Germany said it was bitterly disappointed at the collapse of the Doha Round, saying it would press for the talks to reopen.

"An agreement at the multilateral trade negotiations would have been an important boost at the right moment for the world economy," said Bernd Pfaffenbach, state secretary at the Economics Ministry in Berlin.

He said the German government would work insistently on a resumption of the talks as soon as possible.

"We cannot afford any lengthy idle period," said Pfaffenbach, saying that all WTO members would benefit if markets were opened.

Ludwig Georg Braun, president of the Federation of German Chambers of Industry and Commerce DIHK, called the breakdown a "harsh setback" for business.

"A major opportunity has been wasted, especially considering that the world economy is clouding over," he said.

EU fears job losses

Before the talks ended, EU Trade Commissioner Peter Mandelson appealed to delegations to hammer out a deal on the opening of agricultural markets, an issue many observers thought had been resolved last Friday.

"If people don't want this deal, there's no better deal coming along and we just have to consider, if this fails, what they will lose," he said earlier on Tuesday.

A car assembly line in a factory

European Carmakers say the pact's failure could force them to cut jobs in the EU

European automakers and trade unions said the talks' failure could put European industrial jobs at risk.

"The result could be major job losses in the European Union, at the level of the manufacturers, but also in the supply chain," Peter Scherrer, General Secretary of the European Metalworkers' Federation said in a statement.

USA vs. China, India

The agriculture row escalated when India and China refused to further open their agriculture markets, not wanting to entirely weaken the applicable mechanisms protecting their farmers.

Delegates said negotiations stumbled on proposals for so-called SSM measures to protect poor farmers that would have imposed a special tariff on certain agricultural goods in the event of an import surge or price fall.

The two countries, saying they are speaking for some 100 developing countries, argued for a customs arrangement to protect farmers in poor countries against excessively high food imports.

The differences have pitted the United States on one side and India and China on the other.

Susan Schwab

Schwab said the USA was still committed to the Doha round of talks

US trade representative Susan Schwab accused the two countries of undermining the hard-fought compromise package, saying the United States had made great concessions especially in regard to the removal of its cotton subsidies.

"We were so close to getting this done," Schwab told reporters at WTO headquarters after countries failed to compromise over measure to protect farmers in poor countries.

Time for a change of focus?

Some WTO representatives sympathized with the two developing countries, saying that in light of the still enormous numbers of poor that China and India have to care for, agricultural and food security in these countries had to be strengthened, not weakened by cheap imports.

A wind turbine

Energy issues are currently less heated than agriculture disputes

A large portion of poorer developing countries supported the Indian-Chinese position.

With a new president taking office in the United States, changes in the European Commission, and a possible election in India all occurring next year, the future of the Doha round trade talks could be in jeopardy as leaders set new trade priorities, according to experts cited by the Reuters news agency.

"This fourth collapse after Cancun, Hong Kong and Potsdam suggests that the WTO members may need to rethink the agenda rather than try again with the same program," Edward Gresser, of the Progressive Policy Institute in Washington, told Reuters.

"In particular, they might move agricultural reform out of the center for a few years, and focus instead on big newly emerging industries … where attitudes are less entrenched and emotional."

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