July 30, 2008 / 6:14 AM / 11 years ago

India, U.S. urge progress made in WTO talks be saved

GENEVA (Reuters) - The United States and India both said on Wednesday they hoped to build on progress made before world trade talks collapsed, but clashed again on the issue that brought the meeting down.

“We’d like to believe that there’s progress here that we could build on going forward,” U.S. Trade Representative Susan Schwab told reporters, one day after the latest rescue effort for the Doha trade round ended in failure.

“We put significant offers on the table. Should others be prepared to push forward and respond to those offers in meaningful ways, we’re there,” Schwab said.

Negotiators had worked feverishly over the past six months to resolve farm and manufacturing issues blocking progress in the nearly seven-year-old round. Trade ministers from around 30 key World Trade Organization (WTO) members gathered in Geneva on July 19-20 to try to finish that task, but failed to do so after nine days of intense talks.

“I would only urge to the director-general to treat this as a pause, not a breakdown, to keep on the table what is there,” said Indian Commerce Minister Kamal Nath, warning developing countries not to “fritter away” a potentially valuable deal.

But Schwab and Nath, in separate news conferences, showed no sign of bridging differences on the issue that brought down the talks — the question of when developing countries should be allowed to impose emergency restrictions on food imports.

Schwab said Washington had already made a major concession by agreeing to a compromise package crafted by WTO chief Pascal Lamy that would allow developing countries to hike tariffs above current maximum levels when imports grow by 40 percent compared to a three-year moving average.

That would have allowed China, which agreed to big cuts in farm tariffs when it joined the WTO in 2001, to hike soybean duties in eight out of 10 years, and India to raise palm oil duties in three out of six years, she said.

“You can imagine any number below (40 percent) turning into a free-for-all, where developing countries were raising barriers every year,” Schwab said.

India had argued for a trigger of 15 percent import growth to allow poorer countries to quickly stem a flood of imports.

Groups representing about 100 developing countries believed firmly that the “vulnerability of the poor farmers could not be traded off against the commercial interests of the developed countries”, Nath said.


A senior EU official said the United States had been inflexible in discussions on the safeguard, while India and China had shown some willingness to find a compromise. “They were not very flexible but they started to show some signs of movement. But the U.S. stuck to its position,” he said.

The impasse blocked talks on another concern for developing countries — U.S. and EU cotton subsidies, blamed for stealing export markets from West African producers and overproduction.

“The cotton issue is extremely urgent because the cotton industry in our countries is threatened with extinction ... in the short term,” Burkina Faso Trade Minister Mamadou Sanou said on behalf of the Cotton Four group of African producers.

Schwab promised to continue bilateral talks with the C4. But without a broader Doha round package, it is unlikely any U.S. administration could persuade Congress to accept the deep cotton subsidy cuts West Africans want.

Schwab said she came to Geneva with strong backing to negotiate a deal that would cut farm subsidies, even though Congress had just approved a generous new farm subsidy law. But that required the United States to gain new agricultural markets in both developed and developing countries, she said.

The EU official said the U.S. strategy for seeking farm export gains in return for subsidy cuts had dogged negotiations for years. “Frankly when you’re talking about opening up markets in developing counties it’s nearly a provocation. You cannot win in all parts of the negotiation,” he said.

Additional reporting by Jonathan Lynn and William Schomberg; Editing by Catherine Evans

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