CBSN

WTO Trade Talks Collapse

Miguel Martinez, left, operates a combine while his brother, Leo Martinez, Jr., right, follows along in a grain cart pulled by a tractor harvesting sorghum fields in Willacy County, Texas, July 11, 2003. Area farmers rushed to harvest amid fears of tropical storm Claudette hitting the Rio Grande Valley.
AP
Talks designed to change the face of farming around the world collapsed Sunday amid differences between rich and poor nations, the second failure for the World Trade Organization in four years.

"It's over," said George Odour Ong'wen, a Kenyan delegate. "The differences were very wide, and it was impossible to close the gap."

Developing nations saw the talks as a way to end rich countries' agricultural subsidies that make it hard for them to compete in the globally. European nations and Japan were intent on pushing four new issues that many poor countries saw as a distraction.

In the end, it was the diverging agendas of 146 member countries that split delegates beyond the point of repair.

"The blame for the collapse must go to the Western countries, because they insisted on putting their issues first," said Yasphal Tondon, a delegate from Uganda.

Before the talks collapsed, delegates spent Sunday debating not the key changes to farming policy that they have spent much of the conference negotiating, but instead four proposals about foreign investment and competition from the European Union and Japan.

Delegates said the Europeans agreed to back off on three of the proposals, but insisted they be granted one. That was unacceptable to many developing nations.

The announcement that the talks had failed appeared to take some delegates by surprise. One journalist ran into a briefing by U.S. trade officials, demanding reaction. Deputy U.S. Trade Representative Josette Shiner looked startled and said she would look into it.

In the hallways, delegates said the meeting's chairman, Mexican Foreign Secretary Luis Ernesto Derbez, was informing delegations of the talks' failure.

The failure was a major blow to the WTO, and to efforts to regulate the world's trade. In 1999, talks in Seattle collapsed amid violent street protests and divisions between rich and poor nations.

Many of the poor nations were frustrated that officials delayed discussion of agricultural reform on Sunday. Delegates had hoped to slash the subsidies rich nations pay their farmers and lower the tariffs many countries charge for importing farm goods.

Doing so could have dramatically altered farming around the world. Some farmers could have found new markets for their crops. Others would have struggled to compete without the subsidies that keep them in business. Consumers could have gotten cheaper fruits, vegetables and meat from distant shores.

More than 50 advocacy groups issued a joint statement Sunday attacking the WTO for making its decisions in private and saying it was failing to listen to poor member states.

"Developing countries have put forward many constructive proposals," the statement read. "That these have been almost completely ignored shows the WTO continues to operate in business-as-usual mode, with the EU and the United States calling the shots."

Still, not everything about the meeting is being seen as a failure, according to CBS News Analyst Pamela Falk.

"All economists agree that more the more trade there is the better for everyone," Falk says. "The less barriers to trade, the better the economy is and protectionism puts up barriers. So, manufacturing jobs and the United States economy which has its problem international economy and U.S. manufacturing jobs have been somewhat problematic in the past few years. That would be helped by an agreement and there was no agreement so in that sense it was a true failure. But there was some light at the end of the tunnel because there's been some movement on both sides."