Outlook gloomy for new trade deal

GENEVA – A conference intended to achieve a last-ditch breakthrough in global trade negotiations collapsed Saturday, sharply diminishing prospects for an agreement that has been touted as a potential boon for the world economy and poor countries in particular.

Trade ministers from about 60 countries, who had planned to negotiate at the World Trade Organization’s headquarters here until today and perhaps even Monday, said Saturday morning that they were so hopelessly deadlocked on issues such as reducing farm subsidies and tariffs that they were going home early. The impasse, some said, could undermine the WTO and the multilateral system that has underpinned the expansion of global commerce since the end of World War II.

“There is no need to pretend that this has not been a failure,” said Kamal Nath, India’s commerce and industry minister. He spoke at a news conference of representatives from developing countries, many of whom blamed the United States for making what they called unreasonable demands on them to open their markets.

Participants held out the prospect that negotiations during the next several weeks could result in a compromise by the end of the month on the main issues in the Doha round, the talks begun in the Qatari capital in 2001 to lower trade barriers worldwide.

“We remain fully committed to an ambitious, robust round and have no intention of giving up hope,” said Susan Schwab, the U.S. trade representative.

But seasoned trade diplomats expressed skepticism because the gaps are so wide and the negotiating positions are so rigid. Inability to reach a compromise this month would almost surely doom chances for completing the Doha round before new political problems complicate the task even further – prime among them the looming expiration of President Bush’s authority to negotiate trade agreements.

“The result of these discussions is pretty clear: There has been no progress. And therefore we are in a crisis,” said Pascal Lamy, the WTO director-general.

Fears were widely expressed about the risk of an increasing trend toward negotiating two-way and regional trade agreements, which could sideline the WTO and erode the authority of its tribunals in adjudicating trade disputes.