Though hard to believe, hopes for the Doha Round of world trade negotiations just got darker. Over the weekend, U.S. President George W. Bush lost his “fast-track” power to negotiate trade deals that cannot be amended by Congress. Earlier, trade ministers from the “Group of Four” — Brazil, the European Union, India and the United States — met in Potsdam, Germany, to see if they could hammer out a deal to take to the World Trade Organization for consideration, but those talks have collapsed amid mutual recriminations. The next steps will be even more difficult.
The Doha Round was launched six years ago with the original aim of focusing on developing country access to markets in the developed world. Politics quickly pre-empted the good intentions as developed economies demanded large concessions from their trade partners in exchange for liberalizing their agriculture markets, the key concern of developing nations.
Talks were stalemated at first by the inability of the EU, the U.S. and Japan to agree among themselves on changes in agricultural protection. In recent months, however, Brussels and Washington had appeared to find common ground, and the result was the Potsdam meeting. That has broken down with both sides blaming the other.
The U.S. and Europe complained that their cuts in agricultural protection were not matched by offers from Brazil and India. The latter two countries countered that they could not justify opening their markets to manufactured goods with the underwhelming concessions offered by Washington and Brussels. Now it is up to the 150 members of the WTO to reach a deal, and that is unlikely. Time is running out as key countries, the U.S. and India among them, enter national elections. Negotiating dynamics are much more difficult with so many countries at the table. Worse, the atmosphere is deteriorating as negotiators are beginning to question the good faith of their counterparts. With tens, if not hundreds, of billions of dollars of trade at stake, a deal would seem both desirable and urgent. There is little sign that negotiators agree.
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