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Doha stalemate

July 05, 2006

WHEN A MEETING OF international trade ministers in Geneva collapsed last weekend, it wasn't just the latest disappointing failure by the World Trade Organization to produce an agreement in the Doha round of talks -- it may have been the last. Because it will take about a year to finalize any deal, and President Bush's authority to fast-track trade pacts expires in July 2007, this month is widely seen as a make-or-break deadline in the round. Yet all sides are locked in seemingly immovable stances.

Trade negotiators from Europe, the U.S. and the world's leading emerging economies have been talking past each other for years -- alternating between proposals that never quite engage the others and pointing fingers. Their cynicism is especially disappointing because this round of talks was meant to level the playing field for poorer countries, mainly by lifting developed nations' barriers to free trade in agricultural products. The Bush administration has floated a number of worthy proposals, but it might have done better in pressuring the recalcitrant Europeans -- the most egregious opponents of needed liberalization -- with a dramatic, unilateral move.

And why not? Who does the U.S. trade delegation represent when it refuses to budge on farm subsidies and market access? Certainly not American taxpayers or consumers. Farm subsidies cost taxpayers about $19 billion last year. For their money, consumers got the privilege of paying more for some food because farm supports (and quotas on some imports, such as sugar) distort markets.

Much of U.S. agricultural policy is designed to protect the interests of a small number of large and wealthy producers. Laws originally passed to aid small farmers during the Depression now result in astonishing inequities and are often counterproductive. The Washington Post recently revealed that the federal government has paid at least $1.3 billion since 2000 to people who don't farm at all -- they simply happen to own property that was once used as a farm. Meanwhile, real farmers who rent cropland are being forced out of business by landowners who find it more profitable to use their property for other purposes while continuing to collect federal cash for crops they aren't growing.

Ending these subsidies and lowering agricultural tariffs would boost the U.S. economy, eliminate waste and help farmers in the Third World trade their way out of poverty. It's a shame Washington thinks that its protectionist farm policies are something to be surrendered only grudgingly, and only if others do so. Good riddance, we say.

There may be a last opportunity to prevent the Doha round from dissolving into disaster. Starting July 15, the leaders of the Group of 8 industrialized nations will meet in Russia, and trade ministers are trying to convene a top-level session to break the Doha impasse. Bush should embrace the chance and come to St. Petersburg prepared to give some ground on subsidies.

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