EU and US play Doha Round ‘blame game’

EU Trade Commissioner Peter Mandelson refuted US accusations about the EU’s lack of ambition, saying: “To raise our envisaged average farm tariff cut from 39% to 50% is hardly putting nothing on the table”. 

He also said that “other negotiators, to a greater or lesser extent, also showed flexibility on areas where they had acute defensive concerns, be it in agriculture or industrial tariffs…But the United States, I regret to say, showed no flexibility at all in the end on the issue of domestic subsidies in agriculture”. 

He stressed the fact that the EU had finally managed to align their position with nearly all negotiating groups. Other than the Cairns Group and the US, negotiators recognised the important and painful concessions already made by the EU, he said. 

The broad agreement reached between the EU, the G20, the G90 group of developing countries, and the G10 covered 80% of WTO membership, but despite this, he said, “the United States seems to be saying to the rest of the world: ‘we are right, you are isolated’”. 

US Trade Representative Susan Schwab responded by saying that Mr. Mandelson’s statement was an attempt “to divert blame for the stalemate” and “is false and misleading”. 

She reminded that the EU "has average agricultural tariffs twice those in the US and domestic supports three times greater than the U.S”. 

She said the US had “put forward the most bold agriculture proposal advanced to date” but that the EU had been "unable to endorse the US proposal given substantial opposition from France and a few other member states with strong farm interests".

She acknowledged that the U.S. had made no new proposal at the fateful G-6 meeting which led to the collapse of the talks, but insisted this was because no other members had indicated any new flexibility in market access despite promises made at the earlier G-8 meeting (See EURACTIV 17 July 2006). 

Michael Moore, WTO director general between 1999 and 2002, said "I think there is enough blame for everyone to share''. "Words are hard to take back" he said when asked about the exchange of hostilities between the EU and the US. "You just can't sit back and throw rocks at Japan, or rocks at the U.S. It just dirties the water." He urged the two powers to get things going again, saying "the bigger you are, the more responsibility you have... The U.S. needs to do something about domestic support and Europe has to do a lot more on market access."

Oxfam  laid the blame on both parties, saying “the ‘development’ potential of the round has been lost because of the narrow self interest and stubbornness of the EU and the US”. 

Following Peter Mandelson’s remarks, the NGO said: “Europe must accept its role in the five-years of failed negotiations at the WTO that led to this week’s chaotic end to the trade talks”. Indeed, while the EU did move closer to the position of the G20, Oxfam said “its offers on market access and domestic support were still insufficient to deliver a pro-development outcome”. 

On Monday 24 July 2006, WTO chief Pascal Lamy formally suspended the Doha Development Round, bringing five years of negotiations to an end (see EURACTIV 24 July 2006). 

In the aftermath of this announcement, the EU and the US have been pointing fingers at each other, arguing over who is most to blame for the failure to conclude a deal on global trade liberalisation. 

The EU’s initial offer consisted of: 

• a 60% reduction on highest agriculture tariffs and an average tariff cut of 39%; 
• higher protection for 8% of agricultural production considered as sensitive products 
• a 70% cut in trade-distorting agricultural subsidies; 
• total elimination of all kind of export subsidies for agriculture products by 2013, 
• a maximum tariff rate of 10% for industrial products, 15% for developing countries 

The US’s offer was: 

• a 90% reduction on highest agriculture tariffs and an average tariff cut of 66%; 
• a maximum tariff rate of 10% for industrial products, 15% for developing countries 
• higher protection for only 1% of agricultural production considered as sensitive products 
• a 53% cut in trade-distorting agricultural subsidies

Following negotiations with their G6 partners, Australia (representing the Cairns group of agricultural exporters), India and Brazil (representing the G20 group of developing countries) and Japan (representing the G10 group of net agricultural importers), the EU agreed to raise its average farm tariff cut to as close as possible to the G20 proposal of 54%. 

It also accepted that developing countries maintain a maximum tariff rate of 20%, but was less willing to compromise on sensitive products. 

The US did not present a new offer, saying that EU and G20 proposals were not ambitious enough and refusing to make further cuts in agricultural subsidies unless the EU and G20 extended their market access. 

• 24 July 2006: WTO chief Pascal Lamy officially suspended the Doha Development Round
• 
  1 July 2007: Expiry of the US Trade Promotion Authority Act (TPA) that allows the administration to present trade agreements to Congress for up or down votes, but not to amend it (See EURACTIV 26 June 2006).

Governments

• US Trade Representative's Office:Statement by Office of the US Trade Representative(25 July 2006)

EU Actors positions

• DG TRADE:Peter Mandelson: "We need to look ahead and to rebuild"(25 July 2006)
• DG TRADE:Peter Mandelson: "There is no more time left": Peter Mandelson statement to the press following suspension of WTO Doha negotiations(24 July 2006)

NGOs and Think-Tanks

• Oxfam:Oxfam says EU must change its mindset at WTO(25 July 2006)

Press articles

• Financial Times:US hits back at EU over Doha collapse(25 July 2006)
• Reuters:UPDATE 3-US, EU swap blame for trade talks failure(25 July 2006)
• Bloomberg:EU's Mandelson Says Differences With U.S. on WTO `Fundamental'(26 July 2006)
• Le Monde:Egoïsmes agricoles(25 July 2006)
• La Libre Belgique:C'est celui qui le dit qui l'est(26 July 2006)
• Reuters:USA weisen EU-Erklärung zu WTO-Gesprächen als falsch zurück(25 July 2006)
• Schwabmuenchner AllgemeineSchwerer Schlag für Welthand(26 July 2006)