Nations Grapple With WTO Talks Failure

GENEVA -- The United States, Europe and other commercial powers grappled Wednesday with the magnitude of their failure to reach a new global trade pact, and traded blame for the collapse of seven years of talks.

A day after a nine-day World Trade Organization summit ended without agreement, Peter Mandelson, the European Union's top negotiator, said he had tried to broker a deal on the farm import issue that ultimately divided the United States and developing countries led by China and India.

While both sides rejected the compromise, Mandelson reserved his sharpest criticism for U.S. Trade Representative Susan Schwab, accusing her of refusing to budge even when her demands were met and then going public with her grievances too quickly.

"It is bad enough to be facing defeat in the last mile of such a marathon," Mandelson wrote Wednesday in his blog. "It's worse to realize that some of the people across the table, instead of working for success, are in reality preparing for failure."

The United States rejected his description of events behind closed doors at the WTO's Geneva headquarters. Gretchen Hamel, a spokeswoman for Schwab, noted that the EU's renegotiating was rejected by multiple countries and was aimed to "deflect attention from the EU's own domestic concerns."

These would include Europe's own defensiveness to opening up farm markets to imports of beef, poultry, sugar and other products. Agricultural imports are especially sensitive in France, where President Nicolas Sarkozy has regularly pointed the finger at Mandelson for conceding too much to competitors in the developing world.

Mandelson's criticism of the United States comes after weeks of close cooperation between the trans-Atlantic partners. Over the weekend, he told trade ministers from the EU's 27 member countries that he and Schwab were "joining up, but not ganging up" to push the negotiations forward.

While the trade talks launched in the Qatari capital of Doha in 2001 have struggled before, this failure was perhaps the most devastating. Faced with global unrest from rising food prices, credit problems from shaky financial markets and the threat of economic downturn, negotiators hoped that a deal this week to open farm and industrial markets would go some way to alleviating these problems.

But the talks hit a snag over an obscure "safeguard" for protecting agricultural producers in the developing world from a sudden surge in imports or drop in commodity prices. While such safeguards currently exist in rich and poor countries, they are rarely used and reflect only a minute portion of the billions of dollars in manufacturing, farm and services gains the WTO's Doha trade round was supposed to create.

Schwab told journalists Wednesday that the dispute with China and India "really wasn't a political discussion" but one over trade policy. She said the two emerging powers were demanding a "free-for-all" that would regularly allow them to raise tariffs on goods such as soybeans, poultry and palm oil, hurting American exporters. That, Schwab argued, went against the basic idea of the WTO's current trade round, which is to alleviate poverty and boost the global economy by making it easier to export farm produce and manufactured goods.