By  on June 22, 2007

Crucial trade talks among the U.S., the European Union, Brazil and India broke down on Thursday, dealing another blow to the six-year effort to reach a new agreement intended to pump billions into the worldwide economy.

The discussions in Potsdam, Germany, collapsed because of discord as to whether the U.S. and EU would make deep enough cuts to farm subsidies and import duties on commodities.

"Unfortunately, what we have here today was not going to generate new trade," U.S. Trade Representative Susan Schwab said at a news conference with U.S. Agriculture Secretary Mike Johanns. "There were more barriers put up to dialogue than the talks could sustain."

Schwab said the position taken by Brazil and India would harm developing nations.

"The biggest losers from the current status of negotiations will be the dozens and dozens of developing countries who need to be exporting, not just to the mature markets of the developed world, but also to the markets of the advanced developing countries," she said. "And that includes countries like Brazil, like India, like China."

However, Celso Amorim, Brazil's foreign minister, and Kamal Nath, India's minister of commerce and industry, said offers on cuts to tariffs and agricultural subsidies fell short of their expectations. Brazil and India declined to accommodate the demands by Washington and Brussels over market access for industrial goods, especially in the case of Brazil, and agricultural products and industrial goods in the case of India.

"It was useless to continue the discussions based on the numbers that were on the table,'' Amorim said.

In a bid to save the talks, World Trade Organization Chief Pascal Lamy has called a special meeting for today of the 150 countries taking part in the overall negotiations, known as the Doha Round.

The talks launched in November 2001 in Doha, Qatar, with the aim of lowering barriers to global trade in goods and services valued at more than $14 trillion a year. The aim was to generate billions for the global economy and help poorer nations to develop. However, major differences between rich and poor countries over how to lower agriculture subsidies, and also tariffs for both farm and industrial goods, including textiles and apparel, have derailed discussions several times.

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