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Doha Round negotiations collapse, U.S., EU blame each other

The Doha Round talks have collapsed after the United States and the European Union failed, once again, to end an impasse over U.S. demands for increased market access in the EU and advanced developing countries.

WTO officials said negotiations among the G-6 countries – the United States, Australia, Brazil, the European Union, India and Japan – in Geneva have been suspended indefinitely because trade ministers were “too far apart” to reach an agreement.

“The United States came to Geneva with the flexibility to offer more on domestic support and market access,” said U.S. Trade Representative Susan Schwab, speaking to reporters along with Agriculture Secretary Mike Johanns at the WTO Headquarters in Geneva today.

“We took seriously the admonition of the leaders of the G-8 Summit in St. Petersburg, but unfortunately the promises of flexibility and market access coming from St. Petersburg did not materialize in Geneva.”

In a later briefing, Schwab said the talks failed after WTO Director-General Pascal Lamy told U.S. negotiators “there was no possibility of convergence” in the positions of the six countries that were meeting in Geneva to try to salvage the talks that began in Doha, Qatar in 2001.

Schwab and Johanns said the United States was prepared to show more “flexibility” in the talks, but that negotiators for the European Union had failed to meet U.S. demands that they be more “ambitious” in providing greater access to the EU markets for agricultural products.

“While the United States was prepared to do more, yesterday’s focus on the loopholes in market access, on the layers of loopholes, revealed that a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions,” said Schwab.

European Union Trade Commissioner Peter Mandelson blamed the United States for the failure of the negotiations, issuing a lengthy press statement in which he criticized U.S. negotiators for not showing greater “flexibility.”

Schwab said the collapse of the talks does not mean the United States is giving up on the Doha Round. “‘Doha Lite’ has never been an option for the United States; it is still not an option. There was no package on the table yesterday that we could have recommended to the President or to the United States Congress.

In his remarks at the first briefing, Johanns cited the European Union’s offer on new quotas for beef as an example of the problems negotiators encountered. The EU reportedly was prepared to offer a tariff rate quota (or TRQ) allowing 800,000 metric tons of beef to enter its 25 member countries duty-free.

“The current tariff for high quality beef in the EU is 80 percent,” Johanns said. “That blocks the market. Under the proposal, the new tariff would be 61 percent. That is still a remarkable blocking of the market, and it makes it impossible to compete. But the TRQ, we finally found out after discussion, would actually allow in 160,000 tons of beef. That’s 2 percent of the market. For the world.”

The agriculture secretary said Brazil and India, two developing countries whose trade ministers also blamed the United States for the collapse, likewise refused to give any ground on market access.

“India and Brazil quite honestly can compete with anybody very effectively,” he said. “Yet in the proposal that they tabled, they essentially blocked 95 to 98 percent of their market. That’s not our figures. That was an analysis done right here at the WTO.”

Schwab said it would be up to the WTO Director-General to schedule any future discussions. “As Secretary Johanns noted, this is a serious failure that we find ourselves in and the question is how to regroup and how quickly could one regroup and move forward and in what manner.”

Schwab and Johanns were asked if the United States made any new offers on domestic subsidies. Schwab said the Bush administration had been prepared to “show greater flexibility” on farm subsidies but had been advised by Lamy not to table its offer since the other five members of the G-6 had not changed their positions on market access.

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