FRANCE has called for the European Union to switch its efforts to regional trade talks in the wake of yesterday’s collapse of talks designed to save the global Doha trade round.

Regional talks could lead to more special agreements to control trade as much as to free it, but they could create at least a proportion of the extra trade hoped to arise from a successful ninth multilateral trade-opening agreement.

The French suggestion will confirm fears in developing countries that the EU and the United States will try to pick them off individually after failing to break down the solidarity of the non-rich majority of the World Trade Organisation’s 149 members.

The US is already trying to complete a series of bilateral deals with countries such as Morocco. The EU has pointed out that some of the smaller countries enjoying special deals, typically those that were once part of European empires, will suffer if access is made easier for bigger, lower-cost producers, as happened with Chinese textiles.

The new belligerence of agricultural exporters has been a feature of the latest trade round since poorer countries were emboldened by riots outside the meeting in Seattle designed to set it up. The Doha Round, started later in Qatar’s capital, was called the Development Round in recognition of this changed mood — but reality never quite caught up with the slogan and the talks have staggered for the past five years.

At a meeting in Hong Kong in December, the EU, the US and Japan pledged to phase out all the direct subsidies they give to food exports. By then, however, ambitions had grown and countries such as India and Brazil were demanding easier access to developed markets for prepared foods and cuts in overall farm subsidies. They claim that the EU, the US and Japan spend six times as much on farm subsidies as the total world aid budget.

Kamal Nath, the Indian Commerce and Industry Minister, said yesterday that the talks ultimately broke down because the West could not accept less than full reciprocity: the idea that the poorer agricultural countries would overall gain more in extra trade this time than richer industrial ones.

Trade professionals argue that unless constant progress is made to make trade freer, and to show the gains to people’s incomes, then populist protectionism will gain ground. For this reason, as well as to salvage its own credibility, the WTO will try its hardest to agree some sort of deal out of the first trade round it has orchestrated. Otherwise, under the all-or-nothing rules, the deals agreed in Hong Kong would also lapse.

Pascal Lamy, the WTO’s Director-General, may try to resuscitate what the US exasperatedly calls “Doha Light”. This might rescue the deal on farm export subsidies, which has been allowed for in the EU’s Common Agricultural Policy, possibly in exchange for gains on developing countries protecting intellectual property.

If the WTO is to regain its authority, it would also have to control any resurgence of bilateral deals, which undermine the principle that all countries must be treated equally. If this cornerstone of trade rules is broken, the world would break up into the sort of blocs that helped to deepen worldwide recession in the 1930s.

COUNTDOWN TO COLLAPSE

Key dates in a stumbling, five-year effort to free up global trade by member nations of the World Trade Organisation:

November 2001: The “Doha Round” of global free trade talks is launched by the WTO after talks in the Qatari capital of Doha. The deadline for a deal is set as January 1, 2005

September 2003: A WTO ministerial conference in Cancún, Mexico, degenerates into a North-South confrontation over rich countries’ agricultural subsidies

August 2004: WTO members in Geneva cancel the original deadline for a deal, leaving the talks open-ended. Three months later, the WTO says that talks could be wrapped up in 2006

December 2005: A WTO conference in Hong Kong agrees that all agricultural export subsidies should be removed by 2013 but broader progress remains stalemated

July 2006: After an earlier WTO meeting to break the logjam ended in failure, ministers from Australia, Brazil, the European Union, India, Japan and the United States convene in Geneva for two days of talks to try to save the Doha Round, still blocked over agricultural subsidies and tariffs. Yesterday, the meeting fell apart

MISSED TARGETS

End July 2006: Members were to have reached broad consensus on the outlines of a trade agreement

End December 2006: Member states were to have agreed a Doha treaty

April 2007: Deadline for President Bush to notify Congress of treaty and secure ratification before the July 2007 expiry of his “fast-track” negotiating authority, allowing him to force a straight “yes or no” vote on Congress

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