Collapse of trade talks is a lost opportunity

It is very unfortunate that the World Trade Organisation (WTO) members failed to reach a global trade pact agreement in Geneva on Tuesday. "There is no use beating around the bush: this meeting has collapsed. Members have simply not been able to bridge their differences," the World Trade Organisation's Director-General Pascal Lamy told journalists after last-ditch bids to strike a compromise on how to introduce mechanisms to protect farm products broke down.

Although the general consensus is that a conclusion to the Doha Round of trade talks - launched in 2001 - would produce benefits for the global trade system, key WTO member countries failed to compromise to reach agreement on the global trade pact. Instead, the talks collapsed again after nine days. And now the member countries have started pointing the fingers of blame at one another. During the talks the United States and India were sharply divided over a proposed special safeguard mechanism in the agriculture sector.

Argentine Foreign Minister Jorge Taiana, however, said that negotiators from rich nations were inflexible. Indonesian Trade Minister Mari Elka Pangestu also claimed that developing countries had been willing to compromise to get a deal.

The failure of the talks will pose a big challenge to the future of global trade. First of all, farmers in developing countries will not be able to get wider access to certain protected markets, especially those in the developed countries. While the European Union and the United States have been traditionally accused of failing to come up with fresh initiatives to reduce farm subsidies and provide a platform for the success of the deal, unfortunately this time around the emerging juggernauts such as India and China were also to blame as they insisted on the right to keep protecting their farmers. This despite the fact that the failure of the talks will affect poor farmers the most.

Besides this, the global effort to provide wider and fairer access for industrial goods has also stalled. Thailand had hoped to benefit from the WTO's planned intellectual protection of the geographical indication clause, which would protect the use of the name "Thai jasmine rice", for instance.

Already some countries have mulled the possibilities of promoting more bilateral trade pacts. However, bilateral trade deals are no substitute to the multilateral trade deal in which the smaller nations would be able to negotiate with the superpowers on an equal footing. Besides, the bilateral trade deals tend to avoid the more crucial trade issues such as "anti-dumping" cases which certain countries have increasingly used to block imports from other countries. More importantly, the bilateral trade agreements don't require signatories to remove unfair farm subsidies that deny a level-playing field to nations comprised of subsistence farmers.

Many had hoped the talks this time would have produced success. Earlier, the WTO talks this week were described as a 'do or die' moment because failure might not lead to another chance soon. The US is entering into its presidential election season, during which any proposed trade pact can become politicised. And if the global economy slumps further, the effort to lift trade barriers will become tougher. Member countries agreed with the need to produce results in line with the current economic environment in which food security has become a global concern. It was estimated that success to the Doha Round would inject an additional US$50 billion(Bt1.6 trillion) to $100 billion into the global economy. There had been expectations farmers would be encouraged to turn out more produce if they could gain wider access to markets in the developed world.

Unfortunately, when the trade negotiators got down to business last week, not enough effort was made to reach a successful conclusion. Both developed and developing nations should stop blaming each other and instead reflect on what could have been done and what should be done to revive the effort to create a global trade alliance.