WTO Talks End Without Compromise

World Trade Organization (WTO) talks on a new global trade pact collapsed as the U.S. and India refused to compromise over a proposal to help poor farmers deal with floods of imports, Reuters reports. 

WTO chief Pascal Lamy said ministers wanted him to revive the talks quickly and he would not yet “throw in the towel.”  Lamy also said the deal would eventually have saved the world economy $130 billion a year just in lower tariffs. Ministers reached about 80% to 85% of an outline deal on the core areas of agriculture and industrial goods, Lamy said.  The final stumbling block, concerned the “special safeguard mechanism”— a proposal to let developing countries raise farm tariffs in the face of a surge in imports or collapse in prices.

Developing countries like India and Indonesia said they needed the measure to protect millions of subsistence farmers from unexpected shocks arising from opening up their borders.  The U.S. feared its agribusinesses would lose new markets just as it made painful cuts in its farm subsidies.  Developing country food exporters like Costa Rica and Uruguay said the measure as framed would cut them off from key markets and even reduce existing trade.

The U.S. and European Union had also clashed with big emerging countries like India and China over flexible treatment for developing nations in cutting industrial tariffs.  U.S. Trade Representative Susan Schwab said U.S. offers for the talks remained on the table.