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Geneva Trade Talks End Without Progress on Treaty

July 02, 2006|From the Associated Press

GENEVA — The world's major economic powers failed to make progress Saturday on a new global trade treaty that they hoped would help lift millions of people out of poverty.

European Union external trade chief Peter Mandelson warned that the long overdue global treaty to lower trade barriers was at "five minutes to midnight."

"This has not been a successful meeting, but nor has it been a disaster," he said. "If, however, we do not turn things around in the next two weeks we will not make a breakthrough this summer and then we will be facing defeat."

An exasperated Kamal Nath, India's commerce minister, was more blunt. "There's no need to pretend that this has not been a failure," he said before leaving early.

The treaty talks are already two years behind schedule. The World Trade Organization has warned that their failure would cost the global economy billions of dollars in growth.

World leaders, including President Bush, have pledged their commitment to the talks, but most countries have rigidly stuck to the same positions they have maintained for months.

Unless a blueprint for a binding treaty is agreed to this summer, diplomats say, the whole process may have to be put on hold until after the U.S. presidential election in 2008 because Bush's fast-track authority to strike trade deals expires next year.

Nath blamed rich countries for the impasse. "I'm willing to negotiate commerce, but subsistence, livelihood and security, I will not be willing to negotiate," he said.

Poorer countries want the EU and United States to reduce support for their farmers. The U.S. and EU want major developing countries to allow more competition in their industrial and services sectors.

Farm trade has become the biggest stumbling block in the talks because poor and developing nations face steep tariffs on their exports to several rich nations. Those costs are compounded by subsidies wealthy countries pay their farmers.

But the U.S. and Canada did sign an agreement to settle a drawn-out and heated battle over softwood lumber, a major home-building component.

The deal, details of which were first released April 27, was signed by U.S. Trade Representative Susan Schwab and her Canadian counterpart, David Emerson. It should go into force after September.

The U.S. timber industry said in April that American home buyers should not expect a price break from the deal. The U.S. goal is to keep Canada's share of the U.S. softwood lumber market from exceeding the current level of about 34%. However, the deal does not impose any specific cap.

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