Global Trade Talks Collapse

Negotiators at global trade talks in Geneva have failed to strike a deal to cut agricultural subsidies in Europe and the U.S. in exchange for a reduction of trade barriers in the developing world. Despite no deal, however, global trade has been expanding.

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block.

You may have noticed the headlines this morning. The Doha Round of World Trade talks has collapsed. These talks have been going on since 2001, but let's be honest, if you're not an international trade expert or a journalist who covers trade, you might not be able to debate the finer points of tariffs and subsidies and market access.

Well, NPR's Adam Davidson claims to have a greater knowledge than most of us, including me, and he's been following the world trade talks for years. Adam, let's start with this basic question. Why did these talks break down?

ADAM DAVIDSON: Well, first off, let me just say what the talks are. So this is 150-plus countries in the world who get together once a year, every few years, to negotiate some of the trickier deals about free trade, global flow of goods, and they were supposed to come this week, come to some agreement to make free trade freer, to make it easier to trade goods across borders.

At the end of the day, they broke down for a really silly technical detail. China and India insisted on a particular kind of thing called a tariff safeguard. The U.S. said no, we want a different kind of tariff safeguard. It was very technical. But that technical, small hiccup represents a massive change in the balance of power in the global economy.

BLOCK: How does that affect, say, the average person in the U.S. or somewhere else in the world, for that matter?

DAVIDSON: If you go by standard economic theory, if there was more free trade, the average person in the world would be a tiny bit wealthier every year, but some people in the world would be punished tremendously. So autoworkers would feel a lot of pain. Farmers might find - some farmers anyway, might find that they can't make as much money, while the rest of us, people like you and me and the average listener at NPR, maybe could in the abstract have a tiny bit more wealth, or goods would be a tiny bit cheaper, but we don't feel the passion that, say, a farmer in the Midwest or a laid-off autoworker in Detroit feels against these talks.

BLOCK: And how do the players line up here, Adam? Who really wanted these talks to go forward and who wanted them scuttled?

DAVIDSON: The broadest groups are in the rich world, so the U.S., Europe, Japan, Korea, it was farmers. Farmers were the biggest opponents because this would've made it much more difficult to give subsidies to farmers, to make quotas, import quotas on agricultural goods, and farmers in the U.S., Europe and Northern Asia would have probably had less money as a result, and they really, overall as a broad brush, really hated these talks.

Then in the developing world, in the poorer world, it tended to be more city people, people who were bankers and insurance company executives, wealthy individuals with powerful connections who didn't want to have to compete with U.S. businesses. Those are the people against the talks.

The people for the talks is sort of everyone else, but not enough. I mean, you know, big banks, big insurance companies in the U.S. - sure, they would've loved for this to go forward, but they didn't care enough to make it their main priority.

BLOCK: You know, you can find two readings and analyses of the fact that these talks have collapsed. Some people say this is a dire thing. Others say it's not really going to matter. What do you think?

DAVIDSON: I think it's certainly dire for the bureaucrats who focus their attention on the World Trade Organization, and there are bureaucrats in every country in the world who are very upset today, but I think there's a way of seeing this collapse as a victory of free trade, and what I mean by that is free trade is so present throughout our world.

We live in a fundamentally different world than we did 10 years ago, 15 years ago, because of the success of previous world trade talks. World trade is so part of every day of so many businesses, so many people's lives, that this talk, the marginal increase in trade that these talks would've represented just didn't matter. It wasn't enough to make people make some painful compromises.

BLOCK: NPR's Adam Davidson covers international trade. Thanks so much.

DAVIDSON: Thank you, Melissa.

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