Germany: Doha’s G4 talks fail again

The Group of 4 have fallen out again, reports yesterday?s Financial Times. Doha?s latest round has collapsed after five days of talks in Potsdam, Germany. The EU, India, Brazil and the US have failed to break the deadlock over a global trade deal that is meant to provide an economic boost for developing nations. The critical issues at stake are industrial and agricultural tariffs and state subsidies for agriculture.

This time round it is hard to know where the blame lies. The Indian and Brazilian representatives, Kamal Nath and Celso Amorim, walked out claiming that the stiff stance taken by rich countries on the subsidy of local agricultural produce and the slashing of import duties was unreasonable. The EU and the US had, on the other hand, demonstrated a willingness to negotiate and the suspicion that the representatives of the developing world may not be acting in good faith has been voiced.

Indian Commerce Minister Kamal Nath said that it was unfair to expect developing countries to pay, in terms of new agricultural and manufacturing export opportunities, in exchange for cutting their trade-distorting farm practices. But the US trade representative, Susan Schwab, argued that cutting farm and manufacturing tariffs in advanced developing countries like India, Brazil and China was as important for boosting global economic growth as US and EU reforms. "What will generate development and the alleviation of poverty is new trade flows. And you're not going to get new trade flows unless you have market openings," she said.

Multilateral talks will follow. WTO director general Pascal Lamy said at a Trade Negotiations committee on Friday that although an agreement would have been helpful, ?this negotiation is not a negotiation among just 4 players, it is a collective endeavour?. There are in fact 150 Members and 29 acceding Observers in the Round. So ?the process will continue in Geneva? concluded Lamy.

Not everyone is as positive, however. One negotiator said that ?if four members cannot clinch a deal how do you expect the entire 150 countries to sit down and talk numbers?.

EU Trade Commissioner Peter Mandelson acknowledged that the failure of the talks in Potsdam ? places a very major question mark over the ability of the wider membership of the WTO to complete this round?.