Tarifs on Bananas is an issue too.

By Edmund Conway, Economist


The Doha round of trade talks were last night on the brink of collapse as a key summit in Geneva faltered amid acrimony between rich and poor nations.

The seven-year long World Trade Organisation talks, which promised to pull millions out of poverty and boost global economic growth, hit a roadblock as European negotiators failed to secure a pledge from developing nations to open up their economies to more industrial trade.

By late last night, insiders said all that was left now was for a “ritual burial” for the talks, which have been beset by political wranglings as well as the credit crunch and a growing scepticism about the benefits of globalisation.

The result could be a worrying rise in protectionism, as countries attempt to forge their own bilateral trade deals rather than open up their borders to all, experts warned.

  • More on economics

    In the afternoon, French president Nicolas Sarkozy threatened to pull out of the talks unless developing countries offered to open up their markets to European countries.


    The French and a number of their European counterparts have warned that they could walk out unless they receive more in return for cutting their farm subsidies and tariffs. It came as the World Trade Organisation’s “make-or-break” summit in Geneva ground closer to its conclusion.

    Mr Sarkozy said: “At the WTO, this agreement which is on the table, if it is not modified, then we will not sign it.” The draft agreement reflects the European Union and United States’ offers to cut their farm support and pledges from poorer nations, led by India and Brazil, to open up their industrial markets to richer countries. However, the EU feels too little has been offered to justify its promise to cut tariffs by 60pc, insiders said.

    Still left on the table are a number of prickly trade issues, including the issue of tariffs imposed on bananas.

    WTO chairman Pascal Lamy has chaired 38 meetings since November attempting to find an agreement between Europe and Latin America, who disagree over the barriers placed on the export of the fruit. By last night, the EU had put a compromise on the negotiating table. However, the Latin Americans had yet to say whether they would accept it.

    In Geneva, many of the debates during this week’s summit have gone on until 4am as negotiators attempted to find a deal. One insider said: “We have got so tantalisingly close, but it’s clear now that we can’t find a compromise. Those baby steps cannot be taken.”

    In an eleventh hour bid to break the deadlock, US president George W Bush privately called India’s prime minister, Manmohan Singh, to aim to find a breakthrough.

    However, with the Indian government facing re-election next year, its ministers are thought to be reluctant to provide any obvious giveaways.

    Britain’s trade minister Gareth Thomas warned that if the talks collapsed it would lead to severe consequences.

    “If this fails, the global economy will miss out on £120bn extra in world trade. Developing countries will miss out on improving their agricultural trade, while in the UK businesses will continue to find it difficult to break into India and China. In the long run, consumers will miss out on lower prices.”

    Mr Lamy said that when it came to industrial market access, “positions still remain too far apart.

    “The priorities among these issues vary among delegations, but I think all agree that more work is needed overall. These issues are both technically and politically complex.”



    Comments are closed.

    Looking for something?

    Use the form below to search the site:

    Still not finding what you're looking for? Drop a comment on a post or contact us so we can take care of it!