The World Trade Organisation's (WTO) top negotiating body held a crisis session on Friday to find a way to salvage the Doha free trade pact, one day after talks between four major powers collapsed in acrimony.
Brazil's Foreign Minister Celso Amorim said the Doha round was still alive despite the failure of the talks in Potsdam, Germany, between his country, the United States, the European Union and India. The Potsdam meeting broke up at the half-way stage after developed and developing nations failed to bridge their differences over farm subsidies and industrial tariffs.
"This is not the end of the story ... I don't think that the Doha round is dead," Amorim told journalists in Geneva. "I think now that the G4 as such is dead and we'll see what we can do on the multilateral level." Following Thursday's breakdown, WTO Director-General Pascal Lamy summoned the WTO's Trade Negotiating Committee to meet in Geneva to underline that the search for an accord would go on.
Although an accord between the G4 could have helped, the negotiations will continue among the full membership to try to conclude a draft deal by August, Lamy said.
US Trade Representative Susan Schwab, speaking to a separate news conference as the Geneva talks began, said Washington was "not prepared to give up" on a Doha deal. "The US will work with any country or any group willing to try to bring this together," she said.
Lamy, a former EU trade chief, has warned that without a breakthrough soon the round could be put on hold for several years or even fail altogether, risking more protectionism and trade disputes. Launched in the Qatari capital in late 2001, the WTO round aims to ease poverty by giving poorer countries more opportunities to trade. But it faced problems from the start, mainly over the issue of agriculture, which is highly sensitive almost everywhere.
Washington and Brussels have demanded that any deal that significantly cuts agricultural protections must open new export markets around the world in farming, manufacturing and services. Developing economies are looking for new opportunities to export their own farm and manufacturing goods. They argue rich countries should not expect big new market access in exchange for cutting their trade-distorting farm subsidies and tariffs.
India's Commerce and Industry Minister Kamal Nath told journalists in Potsdam that the United States had told the closed meeting there it was ready to drop its ceiling for farm subsidies to an annual $17 billion from the some $22.5 billion it had been offering.
But both Brazil and India said this was still more than Washington now spends and were unwilling to move on industrial tariffs or on opening up their own farm markets further. "We will not compromise on the livelihoods of farmers," Nath told a New Delhi news conference on Friday. "There cannot be a trade-off between livelihoods and prosperity."
A senior Indian trade official, who did not wish to be identified, said wrapping up the Doha round by year-end would prove very difficult. "It needs a miracle," the official said. Aid agency Oxfam said the rich countries had failed to present "breakthrough offers" at the G4.
"The EU and US were offering shallow concessions on agriculture, while demanding deep opening of developing countries' markets for industrial goods," said Jeremy Hobbs, executive director of Oxfam International.
US Agriculture Secretary Mike Johanns said the United States and EU had both made "good faith" efforts in Potsdam, while Brazil and India had arrived assuming that the G4 would not come together.
"Unfortunately, they weren't there to negotiate," he said. Despite the Potsdam setback, trade officials said that the heads of the main WTO negotiating committees on farm and industrial goods would present draft proposals for bridging differences, as previously planned, by the end of next week.