Q&A: Setback in Geneva leaves the Doha Round in the doldrums
26th July 2006

The latest meeting in Geneva of the Doha trade talks may have jeopardised the four-year effort to liberalise trade. The six key groups, the US, the EU, Brazil, India, South Africa and China failed to go further in order to reach a deal that aimed to expand free trade and also help poorer countries. A deal may have boosted global growth and increase jobs but sceptics say that it would spell out bad news for poorer countries who would cost jobs.

Why have the talks broken down?

The different countries involved all have different agendas, and their failure to negotiate out a fair deal for all have not succeeded as none of the key parties are willing to compromise enough.

A major issue that was discussed was how far the EU and the US would reduce their barriers such as subsidies and tariffs to agricultural exports from developing countries such as Brazil, India and South Africa.

The EU and the US however want countries like Brazil and India to reduce their barriers to imports of manufactured goods.

Who is to blame?

Each of the parties involved have started to point the finger at each other. Wheras the EU argues that the US have not shown enough flexibility the US have blamed EU's Common Agricultural Policy (CAP). The developing countries have accused rich nations of not taking matters seriously enough.

What happens now?

Although talks could be revived later, the Doha round is facing a lot of problems in the US. The Bush administration has been granted a "fast track" negotiating authority which means that Congress must vote on the deal by July 2007 or risk facing amendments to the deal which would result in more US negotiations.

An extension is highly unlikely as the country faces mid-term elections and also because the balance of payments account is in the red.

It seems quite unrealistic for talks to open up again in the next few months.

What if the trade round collapses?

It would have serious consequences for the World Trade Organisation (WTO) and could lead to bilateral trade deals which is what the WTO aims to reduce and will put smaller countries at a huge disadvantage.

The main losers would be the developing countries such as Brazil, India and South Africa as they have a huge amount of agricultural products that they can export.

Sources - summary of:
BBC Business - Q&A: Troubled global trade talks