Global Trade Talks Collapse over Subsidy Spat Global talks aimed at boosting trade appear to have collapsed. The so-called Doha Round has proved very difficult for negotiators. A major obstacle has been the call by developing countries that the United States and European Union end their agricultural subsidy programs.
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Global Trade Talks Collapse over Subsidy Spat

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Global Trade Talks Collapse over Subsidy Spat

Global Trade Talks Collapse over Subsidy Spat

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From the world financial stage today, the World Trade Organization has suspended global trade talks. This may mean the end of what's known as the Doha Round. It began in 2001 with ambitious plans to use trade to lessen world poverty.

NPR's Adam Davidson reports.

ADAM DAVIDSON reporting:

This past weekend, leading trade negotiators from the U.S., Europe, Japan, Brazil and India got very little sleep. They were in crisis mode, desperately trying to keep the trade talks going. Today, U.S. Agriculture Secretary Mike Johanns, on a lousy phone line from WTO headquarters in Geneva, gave the bad news.

Mr. MIKE JOHANNS (U.S. Agriculture Department): Nothing additional will happen on the round. The negotiating teams have stopped. This round has really been suspended.

DAVIDSON: The WTO is like the U.N. for trade. Rather than have every country in the world negotiate separate trade deals with every other country, the 149 WTO members get together in Geneva and come up with blanket global agreements. At least they're supposed to. This last round of trade talks has been stuck on a few key issues since 2001.

Mr. GAWAIN KRIPKE (Oxfam America): Today's a very sad day for people who care about development and poverty.

DAVIDSON: Gawain Kripke, with Oxfam America, says these trade talks were focused on helping poor people. The idea was that increased trade would allow the world's poorest countries to make money selling agricultural goods to rich countries. According to Kripke, poor country farmers can't compete against farmers in the U.S. and EU who get big government subsidies and have import protections.

Both the U.S. and Europe have made offers to lower agriculture subsidies and trade barriers, but poor countries say the offers are too skimpy. And the U.S. and Europe have spent a lot of time accusing each other of not doing enough.

U.S. Trade Representative Susan Schwab spoke on the same bad phone line from Geneva. She responded to harsh statements from the EU's chief trade negotiator, who accused the U.S. of failing the world's poor.

Ms. SUSAN SCHWAB (U.S. Trade Representative, World Trade Organization): All of the finger-pointing that is taking place is not going to alleviate poverty. It's not going to help one farmer. It's not going to help lift one family out of a destitute situation.

DAVIDSON: Gary Hufbauer, of the Institute for International Economics, says it would be wrong to blame the U.S. for the talks' failures. He says the biggest developing countries, specifically Brazil and India, are more to blame. They refuse to give in to any U.S. requests to open their markets to American manufactured goods and financial services. He says the Bush administration would have been left trying to convince Congress to accept a deal that would hurt U.S. farmers without benefiting other U.S. industries.

Mr. GARY HUFBAUER: All cost and no benefit is no way to get the right number of Congressional votes when you have a pretty tight division within the Congress on any trade agreement.

DAVIDSON: Hufbauer says the real blame should fall on timid politicians everywhere. In the developing world, politicians gave into local, big-money industries who want protection from U.S. competition. In the U.S. and Europe, he says, politicians gave into farmers who want to keep the protections they have.

No matter who is to blame, Hufbauer, Oxfam's Kripke and many others say that it's the poor who will be hurt most by the collapse of trade talks.

Adam Davidson, NPR News.

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