WTO talks fail after seven years of negotiations with mixed reception. Photo: Strauber (flickr)

World Trade Organization (WTO) negotiations in Geneva collapsed last week, ending the hope of many for a new global deal to open markets, reduce farm subsidies and strengthen the international trading system.

This meeting was the latest attempt at talks, which began at Doha, Qatar, in 2001. Supporters of the Doha round, including the World Bank and European Commission, say that a deal would have been a defense against the protectionist strategies they fear will occur as economies struggle globally.

Now they worry that Doha’s failure hurts the credibility of the WTO, which has traditionally determined and enforced the rules of international commerce. The current failure may also damage other international agreements, including those related to global warming. Some economists predict that after the failure of these negotiations, hopes of small countries for gaining better access to consumers in the developed world may be dashed — another deal won’t come for years, if ever.

But others say a Doha conclusion would have been terrible for developing countries.

From the beginning of the Doha Round, through Cancun, Hong Kong to Geneva, the definition of "successful" negotiations has depended on where you sat at the trade table. Of course the USA and EU have some of the largest farm subsidies in the world, and refused further farm subsidy cuts, despite developing countries insistence on protecting their countries' food self-sufficiency from foreign dumping of subsidized agricultural surpluses during a time of rising food prices and global food shortages.

Deborah James, Director of the International Programs for the Center for Economic and Policy Research (CEPR) says of Doha, “The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival.”

The United Nations Conference on Trade and Development estimates that only corporations in developed countries would have profited from the Doha Round, leaving developing nations with most of the cost and none of the benefits. Bolivian president Evo Morales warned, "The WTO negotiations have turned into a fight by developed countries to open markets in developing countries to favor their big companies."

Morales' fears were not unfounded as the U.S., India and China reached an impasse in the failed talks over measures to protect farmers in developing countries from competition from imports.

The global press has responded by exaggerating the conflict and attempting to assign blame for the failed talks. Representatives from the countries involved have joined the fray, trying to spin the outcome to paint themselves in a favorable light.

In some articles, China and India are being blamed for their overconfidence in their new development and therefore too aggressive in advancing their interests to reach a compromise. In others articles, rich industrial powers like the United States and the EU are being blamed for refusing to share with the new powerhouses and refusing to compromise, even though they no longer have the power to push deals through unilaterally.

What is clear is that what is needed now is a new approach for global trade agreements that fairly promote both sustainable commerce and communities worldwide.