The Hindu Business Line : Breakdown in Geneva

While suspending all negotiations in Geneva on the Doha Round, the WTO Director-General, Mr Pascal Lamy, said: "If the political will really exists, there must be a way. But it is not here today. And let me be clear: there are no winners and losers in this assembly. Today, there are only losers." That, in a nutshell, sums up the main reason for the collapse of the negotiations, one which has turned out to be so intractable that the future of the World Trade Organisation itself is probably at stake. Indeed, to some this may be the main message of the failure of the talks, which should be bad news for the poor two-thirds of the world.

In fact, the lack of cooperation at the political level has been clear for some time, as is indicated by the absence of any favourable response to the repeated appeals made by Mr Lamy over the past year — specifically since the run-up to the Hong Kong ministerial meeting of the WTO. The most recent instance of this was the very `frank' talk which the WTO chief had with the G-8 leaders in St. Petersburg on July 17 where he made no bones about the fact that the problem was not `technical' but `political'. Going to the heart of the matter, he had said, among other things, that the price set for the required concessions was too high, adding, "We all know how politically difficult it is to change that price. We know that an added effort has a cost for you. But I am convinced that if we are to reach a compromise, that cost will have to be accepted. What I am asking you to do, since it is ultimately up to you to decide what your parliaments vote on, is merely to weigh this cost against the cost of a failure." The truth of the matter is that the politicians in Washington and Brussels have applied their minds to the subject and concluded that the cost of a failure in Geneva is more acceptable than the cost of a compromise exacted at home.

Mr Lamy has said unequivocally that the main `blockage' responsible for the failure of the negotiations has been the "agriculture (leg) of the triangle of issues the G-6 (India, Brazil, Japan, Australia, the US and the EU) has been trying to address." In other words, the US and the EU have failed to work out the domestic compromises on farm subsidies necessary for their non-agricultural market access (NAMA) demands to become acceptable to the developing countries. This is the crux of the problem, and it is unlikely that there will be any meaningful progress in the negotiations till the hurdle is removed, which is improbable in the near future.