WTO talks collapse on issues of protecting farmers in developing nations

Last night the WTO talks in Geneva collapsed after no consensus could be reached by the participating nations.

NY Times writes about the reasons:

After nine consecutive days of high-level talks, discussions reached an impasse when the United States, India and China refused to compromise over measures to protect farmers in developing countries from greater liberalization of trade. [Snippet taken from here]

Reuters writes a bit more detailed:

The final stumbling block, which dominated talks on Monday and Tuesday, concerned the “special safeguard mechanism” — a proposal to let developing countries raise farm tariffs in the face of a surge in imports or collapse in prices.

Developing countries like India and Indonesia said they needed the measure to protect millions of subsistence farmers from unexpected shocks arising from opening up their borders.

But the United States feared its agribusinesses would lose new markets just as it made painful cuts in its farm subsidies. [Taken from here]

During the negotiations there had been big dissent between the US and the EU on the one side and the emerging markets, primarily India and China, on the organization of future subsidies for the agricultural sector. The US and the EU – both under pressure by their powerful farm lobby – claimed enhanced liberalization of the agricultural sectors, whereas especially India demanded a mechanism to protect sensitive agricultural products from competition.

But even beneath the blocks of industrial and developing nations the different parties had no consistent opinions – Brazil, Urugay and Paraguay opposed the Indian proposal due to own interests and in the run-up the French government had critizised actions of the EU.

Today many participators regretted the collapse, whereas ATTAC appreciated it. I’m curious what Joseph Stiglitz will say.

The consequences of the talks’ collapse are uncertain, especially for developing countries. Maybe the talks will resume after the summer, but due to the American elections, changes in the EU commission and upcoming votes in India there will be different circumstances.

I personally don’t really know what to think of it. On the one hand the WTO has always been a quite powerful instrument of the industrial world to push unfair agreements with the developing world, so maybe further change for the worse has been avoided. On the other hand the collapse of the talks may lead the nations who can afford it (EU, US, India, China, Brazil) to a more protectionist trade policy, which may also complicate advances in less developed countries.

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WTO talks collapse on issues of protecting farmers in developing nations
was published on 30.07.2008 by Florian Sturm. It files under global
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