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Global Trade Talks Break Down

Global trade talks started in 2001 with the aim of opening markets broke down on Monday and there appeared to be little chance they would soon resume.

WASHINGTON — Global trade talks started in 2001 with the aim of opening markets broke down on Monday and there appeared to be little chance they would soon resume.

The negotiations had the potential to lower tariffs on apparel and textiles and open foreign markets to retailers. They might also have exposed U.S. textile producers to greater foreign competition.

Pascal Lamy, director general of the World Trade Organi­zation, formally suspended the negotiations that began in Doha, Qatar. The decision came after a 14-hour, last-ditch effort in Geneva to reach an agreement failed and a week after President Bush and other world leaders at a St. Petersburg summit urged concessions to break the deadlock.

The top U.S. negotiators, Trade Representative Susan Schwab and Agriculture Secre­tary Mike Johanns, decried the collapse of discussions to reach an accord over farm trade barriers and tariffs with ministers from the European Union, Japan, Brazil, India and Australia, touching off accusations from all sides.

“We have missed a very important opportunity to show that multilateralism works,” Lamy told reporters in Geneva.

Schwab said the U.S. trade delegation went to Geneva ready to sweeten the agricultural proposal outlined in October, but did not see reciprocal movement from other countries. She described the breakdown as a “serious failure.”

During a conference call with reporters, Schwab said: “It was evident from the conversation that the new trade flows were not going to be forthcoming and that we were not going to meet the promise of Doha in terms of alleviating poverty and generating global economic growth and development.”

The trade ministers were trying to hammer out a framework agreement that would lead to a larger deal by the end of the year to remove barriers to trade in agricultural and industrial goods, as well as services. The Doha talks were intended to increase global commerce and help lift the poorest nations out of poverty by allowing them to expand their exports. The wealthy nations were to gain more access to poorer countries for their goods and services.

“This is neither desirable nor inevitable,” EU Trade Commis­sioner Peter Mandelson said in a statement. “It could so easily have been avoided….The United States was unwilling to accept, or indeed to acknowledge, the flexibility being shown by others in the room and, as a result, felt unable to show any flexibility on the issue of farm subsidies.”

Celso Amorim, Brazil’s foreign minister, said, “The flexibility announced by the leaders in St. Petersburg did not materialize — the political will was not there.”

Reaching an agreement by the end of this year would have eased its way through the U.S. Congress, which, under a special authority given to President Bush, would not have an opportunity to attach amendments to an accord. That authority expires next July and might not be renewed.

“We do not expect to be able to use the current [trade promotion] authority to enact a Doha round agreement if and when it comes together,” Schwab said.

The collapse was inevitable and not an altogether bad thing for U.S. textile firms, said Auggie Tantillo, executive director of the American Trade Action Coalition.

“The talks were headed in a direction that would have led to substantial reduction in U.S. tariffs on all industrial products, while most developing countries, such as India and China, would have been granted enormous exceptions and loopholes that would have allowed them to continue to protect their markets,” he said. “This so-called collapse could put the talks into hibernation through the rest of the Bush presidency.”

However, Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said, “All is not lost by any means. In the past, there have been these kinds of breaks or hiatuses in negotiations, sometimes that’s what it takes to get a deal.”

On Capitol Hill, lawmakers sounded notes of frustration, though not surprise.

“I’m glad our trade negotiators held their ground,” Sen. Chuck Grassley (R., Iowa), chairman of the Senate Finance Committee, said in a statement. “They appreciate that lesser ambition doesn’t serve our interests and it’s not in the best interest of the global trading community.”

Grassley has repeatedly warned that Congress will not accept a skeletal global trade accord that does not include significant market openings for U.S. agriculture and industrial exports.

“I’m also frustrated that two of our more vocal critics, the EU and India, are also two of the biggest advocates of maintaining protectionist policies in the WTO negotiations,” Grassley said. “As long as they wear blinders, we’ll never see eye-to-eye on a good trade deal, and poorer countries will pay the highest price.”

Rep. Bill Thomas (R., Calif.), chairman of the House Ways and Means Committee, said in a statement, “Frankly, it came as no surprise to me that after promising for years to open markets in theory, the EU at the last minute made a mockery of this effort by slamming shut those same markets.”

Countdown To Collapse

November 2001 — Doha Development Agenda launched in Doha, Qatar.

September 2003 — African cotton farmers walk out of ministerial meeting in Cancún, Mexico.

July 2004 — Trade ministers agree to guidelines to focus negotiations.

October 2005 — U.S. offers to cut subsidies on agricultural goods.

December 2005 — Ministers meet in Hong Kong and agree to reach a framework deal by the end of April, a deadline that is missed.

July 24, 2006 — Talks break down in Geneva over farm trade barriers.

The Fiber Price Sheet
The last Tuesday of every month, WWD publishes the current, month-ago and year-ago fiber prices. Prices listed reflect the cost of one pound of fiber or, in the case of crude oil, one barrel.
 
Price on
Price on
Price on
Fiber 7/24/06*6/26/067/25/05
Cotton 54.10 cents51.80 cents50.34 cents
Wool $2.53$2.43$2.48
Polyester staple 85 cents85 cents69 cents
Polyester filament 82 cents82 cents72 cents
June Synthetic PPI 116114.2112.8
Crude Oil$74.43$70.87$58.65
*The current cotton price is the june average on fiber being delivered to Southeastern region mills, according to Agricultural Marketing Services/USDA. The wool price is based on the average price for the week ended July 14 of 11 different thicknesses of fiber, ranging from 15 microns to 30 microns, according to The Woolmark Co. Information on polyester pricing is provided by the consulting firm DeWitt & Co. The synthetic-fiber producer index, or PPI, is compiled by the Bureau of Labor Statistics and reflects the overall change in all synthetic-fiber prices. It is not a price in dollars but a measurement of how prices have changed since 1982, which had a PPI of 100. Oil prices reflect last week’s closing price on the New York Mercantile Exchange of future contracts for light, sweet crude oil to be delivered next month.

With contributions from John Zarocostas, Geneva, and Kristi Ellis, Washington