FACTBOX: The issues over which the WTO talks stumbled

Tue Jul 29, 2008 12:27pm EDT
 
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(Reuters) - Talks at the World Trade Organization (WTO) to salvage the seven-year-old Doha round foundered on Tuesday on differences between rich and poor countries and developing importers and exporters.

Here are the issues that proved insuperable.

HIDDEN OBSTACLE

* The deal broke down over a relatively obscure but complicated proposal to protect farmers in developing countries from a surge in imports.

* No one expected the "special safeguard mechanism" (SSM) to be the rock on which the talks foundered.

THE BIG ISSUES

* Going into the talks the main issues seemed to be the level of U.S. trade-distorting farm subsidies and the scope of exceptions for developing countries on industrial tariff cuts.

* This month's talks focused on agriculture and industry subsidy and tariff cuts, leaving most other areas until later.

* The United States made an early offer to cut its farm subsidies to $15 billion, and accepted a further cut to $14.5 billion in a compromise proposal last week.

* The new figure is less than one third of the current ceiling, but twice current outlays, so developing countries said it was not enough.

* Rich countries such as the United States and European Union members remained at odds with emerging nations such as China and India over proposals to shield developing countries' infant industries from the full force of industrial tariff cuts.

* One difference was the U.S. push to encourage developing countries to take part in voluntary agreements to slash or eliminate tariffs in individual industrial sectors such as cars or textiles in return for smaller overall tariff cuts.

* The United States said sectoral deals would create real market opening. India and China said the proposed tariff "credit" undermined the voluntary nature of the deals.

THE SAFEGUARD

* In the end it was the safeguard that blocked the talks. The way the safeguard proposal was framed failed to reconcile the vital interests of three important groups:

-- the United States, which sought assurances that market opening in other areas would compensate them for other concessions such as farm subsidy cuts  Continued...

 

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