Global trade agreement collapses as US, India and China trade accusations
“In the face of a world economic downturn, serious inflation and imminent financial risks, the failure will have a major impact on the fragile multilateral trading system,” said China’s Minister of Commerce Chen Deming.
After a week of talks in Geneva negotiations broke down over agriculture. When a deal, albeit a limited one, seemed imminent China and India demanded special farm import rules to protect their farm products, causing the United States to take a more rigid position. Now there is a danger that individual countries might adopt protectionist policies.
“The economic weight of China and India has been increasing” and “they need to take more responsibility,” said Nobutaka Machimura, Japan's chief cabinet secretary.
Criticism is growing against the Asian giants, which expect to take greater centre stage in the world without taking on the corresponding responsibilities, accepting for example negotiated solutions rather than the narrow pursuit of national interest.
Mr Chen rejected the accusation, saying that China “had indicated its willingness to liberalise some services sectors” and its willingness to lower tariffs on several goods. He insisted however that Beijing must protect its poor farmers, imposing tariffs on certain commodities like rice, cotton and sugar in case of falling prices or a sudden import surge.
In turn he blamed the “selfish and short-sighted behaviour” of wealthy nations for the failure of the trade talks, pointing the finger at the United States and the European Union for their unwillingness to scrap the huge subsidies they pay their farmers.
“It’s unfortunate in a development round we couldn't run the last mile because of an issue concerning livelihood security,” India’s Trade Minister Kamal Nath said.
The United States and the European Union want greater access to the service sector in emerging economies which in turn want greater access to Western markets for their farm products.
WTO Director-General Pascal Lamy said the door remains open for an agreement, but it is clear that the current difficult situation of high energy and food prices has contributed to more unyielding positions.
China has indicated its readiness to intensify bilateral ties with other WTO members, especially developing countries, Mr Chen said, indirectly sending a warning to the West that without an agreement it will face even stiffer trade competition.