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Splits and acrimony among G4 partners dash trade deal hopes

By Alan Beattie, World Trade Editor

Published: June 22 2007 03:00 | Last updated: June 22 2007 = 03:00

The chance of a global trade deal being clinched before President = George W.=20 Bush leaves the White House shrank dramatically yesterday with talks = between=20 core negotiating partners collapsing again in division and acrimony.

In a near-exact repeat of events last summer, talks in Potsdam, = Germany,=20 between the four partners at the centre of the so-called Doha round of=20 negotiations - the EU, US, Brazil and India - broke up with sides still = far=20 apart on cutting agricultural subsidies and goods tariffs.

The collapse makes it unlikely that an outline deal can be agreed = before the=20 summer, a step necessary to complete a detailed agreement by the end of = the=20 year. With the US presidential race starting in earnest next year, many = in the=20 talks believe the political sensitivities in any deal mean no agreement = can be=20 concluded until there is a new incumbent in the White House.

Kamal Nath, the Indian trade minister, accused the rich countries of=20 arrogance and inflexibility. He told the Financial Times: "It is not = just a=20 question of figures. It is a question of attitude. The US does not = realise that=20 the world has changed." The US and the EU said Brazil and India offered = no=20 serious access to manufactured goods markets in return for proposed = reductions=20 in US farm subsidies and European agricultural tariffs.

The failure of the so-called G4 to broker an outline deal will throw = the ball=20 back to the entire membership of the World Trade Organisation in Geneva, = where=20 the chairmen of the farm and industrial goods talks are preparing draft = versions=20 of a deal. But trade officials were pessimistic.

Manuel Teehankee, the Philippines WTO ambassador, said: "This is not=20 statesmanlike of the G4. The only way out is to accede to the = multilateral=20 process but, without G4 agreement, it is unlikely to succeed."

Unlike last year's collapse, when the US found itself isolated, the = EU=20 yesterday joined the Americans in demanding bigger cuts in goods = tariffs. Peter=20 Mandelson, EU trade commissioner, told reporters: "It emerged from the=20 discussion on [industrial goods] that we would not be able to point to = any=20 substantive or commercially meaningful changes in the tariffs of the = emerging=20 economies." He said Mr Nath unilaterally declared the talks over without = consultation.

Additional reporting byEoin Callan

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