Geneva -- Hopes for a new global pact to lower trade barriers and open markets ran aground a month short of a pivotal meeting in Hong Kong, as negotiators acknowledged that after four years of talks they weren't ready to agree on even a basic agenda.
The failure to make progress among countries here and in London in the last two weeks became more evident in the last two days, leading top negotiators for several trade powers to abruptly drop their public stance that the goal of a broad trade agreement could still be reached by year end.
The deadlock came only days after a conference of Western-hemisphere heads of state ended in failure over the question of free trade, and underscores how difficult negotiating free-trade pacts has become given the sharp differences between developing and wealthy nations.
Trade ministers said they still would pursue an ambitious deal to lower agricultural farm tariffs and barriers to international trade in manufactured goods and services but that it would take into next year to figure out how. It was far from certain that the 148 countries involved could agree on how to scale back.
The delay also plunged the talks into the midst of a difficult political calendar in the U.S., as a Congress already wary of trade deals heads into an election year, to be followed by the start of the next presidential campaign. That leaves an uncertain picture for businesses around the world looking for a new pact to open opportunities for growth.
Rancor and frustration came out as yet another bid to find common ground on agriculture failed last night. The European Union bore the brunt of blame, as other ministers continued to complain that it would not offer any more cuts than it already had in its high farm tariffs.
"I don't think they are serious about obtaining anything," Brazilian Foreign Minister Celso Amorim said of the EU's latest farm-tariff offer. "It's just an excuse to say the round didn't fail because of them. They can fool their own public opinion, but they won't fool me or Brazilian public opinion." To have any hope of an agreement, he said, "We may need a Hong Kong II."
The Doha Round negotiations, which started in 2001, are the most far-reaching and complex global trade round ever undertaken. Formally known as the Doha Development Agenda, they are supposed to be focused on using trade to help the economies of developing countries.
Their stall-out indicates what may be a general unease with further trade liberalization around the world. In the U.S., Congress has approved the last two trade deals by margins of two votes or less. In the European Union, members states are unwilling to press France to ease up further on agricultural subsidies. India, China, Brazil and other major developing nations are unwilling to further open their markets for fear of cheap imports harming their domestic industries.
The effort to craft a new trade pact dates to a calamitous World Trade Organization negotiating session in 1999 in Seattle, where antiglobalization protestors clashed with tear-gas wielding policeman in the streets, and delegates from developing nations balked at following the U.S. and EU lead as they had in numerous negotiations beforehand. To revive the failed talks, delegates in Doha, Qatar, two years later agreed to push for an agenda that tilted more toward issues of importance to developing nations, especially rich-country agricultural subsidies.
But the negotiations stalled almost immediately and a meeting in Cancun, Mexico, in 2003, meant to kick-start the talks, collapsed as developing nations complained then -- as now -- that the U.S. and EU hadn't made sufficient concessions on agriculture.
Since then the U.S. has agreed to scale back agricultural subsidies, as has the EU, although at lesser scale. But those concessions haven't been sufficient to unlock negotiations, and the developing nations haven't responded with concessions of their own.
It was unclear exactly how countries would reorganize their Hong Kong meeting in mid-December -- given that the same players who couldn't agree on their main framework would now have to agree on what to keep in and leave out. Analysts said one possibility would be just to agree on a new timeframe for tackling the most divisive issues over the course of 2006.
As late as yesterday morning, leaving fruitless talks in London, EU Trade Commissioner Peter Mandelson said he was still pressing for a wide-ranging agreement in Hong Kong. "The moment you start reducing expectations, you risk introducing complacency," Mr. Mandelson said. "My view is that we should keep up the pressure to narrow the differences."
But arriving in Geneva for broader talks in the afternoon, he sounded more pessimistic. "There is a clear preference by the great majority to adjust expectations," he said.
Amid the deteriorating atmosphere, U.S. trade officials scrambled to ensure the long-term ambitions aren't lowered as well.
"I think we have to stick with Plan A," said U.S. Trade Representative Bob Portman, when asked whether major players in the WTO had begun drafting Plan B for the shaky talks. "To meet the potential that Doha promises, we need to be sure that we're all being ambitious, in terms of reducing tariffs, reducing subsidies, and allowing people to trade," he said. "That's the key to economic growth."
Trade diplomats have for months stressed the importance of agreeing to a framework Doha deal in Hong Kong. That would then leave a year or so for technical details to be worked out before the start of 2007. That's the year that the Bush Administration's Trade Promotion Authority expires. After that, Congress would be able to veto U.S. participation in any Doha agreement.
Sergio Marchi, a former Canadian ambassador to the WTO and now president of Legacy House Investments in Geneva, noted that trade talks almost invariably run to the 11th hour. The key, he said, is for ministers in Hong Kong to clearly spell out what happens next. "Plan B can be honorable," he said. "But you can't let it drag out into six months of finger pointing and navel gazing."
