WTO talks collapse in Germany

POTSDAM, Germany (AP) — The World Trade Organization is running out of last chances.

With emotions ranging from anger to confusion, officials from the WTO’s four biggest powers left Potsdam on Friday having failed to break a six-year logjam between rich and poor nations and eliminate trade barriers to agriculture and manufactured products.

A new world trade pact aimed at adding billions of dollars to the global economy and lifting millions of out of poverty remains in limbo. Few believe upcoming negotiations in Geneva among 150 members will be any more successful than those that involved just the United States, the European Union, Brazil and India.

"We feel like the rug was pulled from under our feet," U.S. Agriculture Secretary Mike Johanns said after the talks ended Thursday, two days ahead of schedule.

Brazil and India criticized the United States for failure to cut away some of the billions of dollars in subsidies it pays annually to American farmers. Critics say the subsidies unfairly deflate international prices — making it impossible for poorer nations to develop their economies by selling produce abroad.


The European Union and the United States said the emerging economic powers refused to offer new market opportunities for manufacturing exports. Brussels and Washington did say, however, that they were pleased with each other for showing flexibility.

Behind the scenes, it seemed everyone questioned why the talks were halted prematurely.

Europe and America questioned Brazil’s intentions and wondered if it intentionally blocked progress to curry favor with developing countries, many of whom were unhappy with the private negotiations among the four powers. Brazilians accused Washington and Brussels of agreeing beforehand to protect their agricultural interests. Many criticized Indian Trade Minister Kamal Nath, who arrived late Tuesday after a missed a flight and for having a return flight scheduled ahead of the summit’s end.

Everyone said they negotiated in good faith.

Failure to agree on a framework to cut tariffs and slash subsidies could make an accord impossible for at least three years — if at all — trade officials warned ahead of the meeting. They say subsidy and tariff concessions are very unlikely in 2008, when U.S. elections will be held, and 2009, when Indian elections are scheduled.

But Brazilian Foreign Minister Celso Amorim said Thursday, "It was useless to continue the discussions based on the numbers that were on the table."

EU Trade Commissioner Peter Mandelson said the failure "places a very major question mark over the ability of the wider membership of the WTO to complete this round."

All four of the powers said a breakthrough would now have to come from multilateral talks. Amorim, Mandelson and U.S. Trade Representative Susan Schwab headed to Geneva on Friday to talk with WTO delegations excluded from the Potsdam meeting.


A formal meeting of the 150-member body was also scheduled.

An official with knowledge of trade discussions said(earlier this week that the U.S. indicated it was willing to limit farm subsidies to $17 billion. But Brazil insisted on a figure somewhere below $15 billion, according to the officials. The difference was closer than what the two countries have publicly stated.

The EU showed flexibility on the sensitive issue of farm tariffs, but Brazil and India offered lower cuts in manufacturing tariffs than what they have said privately they could accept, according to officials present in the meetings. Nath, officials said, even claimed India was among the WTO’s "least developed countries," which are excluded from having to make concessions in the Doha round.

It is unlikely Brazil and India will offer more flexibility in Geneva, where they negotiate in unity with countries such as Argentina and Venezuela that are skeptical of industrial liberalization.

Venezuela President Hugo Chavez urged Andean nations to walk away from separate free trade talks with Europe on Thursday.

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