After five years and very little to show for it, global trade talks meant to reduce poverty worldwide involving over 140 nations are at a crucial point, says the head of the World Trade Organization.

After a meeting of top industrialized nations in Russia last week for the G8 conference, the resolve to unblock the troubled Doha round of talks will again be tested when the negotiators meet in Geneva on Sunday, with World Trade Organization head Pascal Lamy stating the main players in the talks can only gain credibility if they act by compromising with specific trade figures.

The time for delay is over. If Members are serious about creating a more open, equitable and relevant trading system — that's what they say and I believe them when they say this — there is no option but to move now.”

The G8 meeting, which ended on July 17th, was overshadowed last week by not only an ongoing crisis in the Middle East , but also stalled trade talks within the World Trade organization, which continue amid long-standing disagreements over tariffs and subsidies between the United States and European Union.

Basically, the goal of the talks involves the US cutting farm subsidies, the EU offering more access for agricultural imports, and emerging economies such as Brazil and India reducing tariffs on manufactured goods. The real potential lies in lowering tariff barriers to improve market access for all nations.

Russia hosted the summit as the G8 group’s president for this year. The main themes on the formal agenda included energy security, coping with infectious diseases, and education, plus a discussion of current topics such as the nuclear threats from North Korea and Iran and the dire state of the Doha round of world trade talks.

However, the call to conclude the negotiations of the WTO's Doha Development Agenda (DDA) reached an impasse, after negotiators missed yet another deadline in June. The resolve of the World leaders will be put to test to unblock Doha round of trade talks at this weekend's meeting of trade powers, Susan Schwab, U.S. chief negotiator said on Tuesday.

We should see the impact of the G8 leaders' commitment by this weekend, U.S. Trade Representative Susan Schwab told journalists after a meeting at the WTO's Geneva base.

The 149-nation trade round, which bears the name of the Qatari capital where it began in late 2001, was meant to boost growth by yielding a wide-ranging treaty that will tear down trade barriers such as subsidies and customs duties and lift millions out of poverty in the developing world. It is already well behind schedule. The talks also include complex issues such as anti-dumping rules and help for poorer states.

The round was meant to end in 2004, but that target was later pushed back to December 2006.

Since they began, the negotiations have missed deadline after deadline because of persistent disputes between rich and poor nations over the relative concessions required.

The outcome of last week’s G8 summit was met with a lukewarm response. Critics said there had been a lack of progress with no new timetables for action or targets being set.


Despite its central role in launching the Doha round of global trade talks, the US has been criticized for preventing a Doha deal, by demanding too much liberalization from other countries while offering too little. In other words, US has been accused of setting its ambitions too high.

The US, for instance, has set the bar to cut tariff barriers by an average of 66 percent. The EU's offer was 39 per cent and the big emerging economies including Brazil, China and India desired a 54 percent cut from rich countries.

The US is also under fire from developing countries over subsidies paid to domestic farmers. On the other hand, US legislators have proposed to reform, by cutting their average tariffs on agricultural imports by 61 percent and eliminating all its trade-distorting subsidies, only if other countries were willing to put reform proposals on the table and deliver overseas market access, said Jason Hafemeister, the lead United States Trade Representative official for the WTO agriculture talks, according to AFP.

The Chief Responsibility Lies Here

The chief responsibility lies here, declared the WTO in an article on its website’s main page this week.

WTO chief Pascal Lamy, who was in St Petersburg, told the G8 leaders on Monday that his consultations with the six countries had revealed scope for only marginal movement.

He added that the chief political responsibility remained with the members present at the meeting. Suggesting that the differences arise from political problem, rather than technical, he asked negotiating parties to ponder the cost of failure against 'a few billions' to fix the problem.

Failure would mean scrapping the results that we have accumulated at the negotiating table over the past five years, results that would make this round the most ambitious of all the rounds concluded over the past 50 years...In fact, these negotiations are already potentially worth two to three times more than the preceding negotiations.

He argued that a multilateral trading system is the least expensive insurance policy available to the world economy and that failure would send out a strong negative signal for he future of the world economy.


Trade diplomats say that without a breakthrough in the coming month, the Doha round risks being put on hold for years.

Who would bother with such cumbersome talks in future if they yielded so little this time around, The Economist read, citing Jeffrey Schott, of the Institute for International Economics, a Washington think-tank.

He argued that, even though the price of concessions in their public opinion views may be too high, the cost will have to be accepted in a compromise.


The target for the upcoming WTO meetings is to reach a deal on the mathematics for cutting subsidies and customs duties.

Revealing true bottom lines and opportunities to ask “What if?” may help reach the template agreements or modalities in overcoming the red lines for the major players, said Lamy earlier this month in Tokyo.

What if your trading partners moved more in this direction? What if they asked you to do more in that direction? What if you gained more market access for product x but less for product y? What if this type of agriculture subsidy was reduced more than that one?

Admitting that 149 Member governments reaching agreement by consensus is no statician's job, Lamy said numbers for market access and subsidy reductions, rather than copious text, is necessary in bringing about a deal.

At an emergency meeting at the WTO in Geneva on Monday following the G8 summit, US, EU, Japan, Brazil, India and Australia agreed to meet on successive weekends at the WTO's Geneva headquarters in an attempt to forge an accord.

We should see the impact of the G8 leaders' commitment by this weekend, United States Trade Representative Susan Schwab said.