[Kabar-indonesia] 5 updates: WTO Collapse Set to Fuel Asia's "Noodle Bowl" Effect [+WP]

[JoyoNews at aol.com]

Note: also see the previously sent: NYT: Trade Talks Collapse; 
U.S. Blamed for Inflexibility [+Dow Jones; Bloomberg]

- WTO Collapse Set to Fuel Asia's "Noodle Bowl" Effect

- WP: Trade Talks Fail After Stalemate Over Farm Issues
  [Collapse Comes With Finger-Pointing]

- Reuters: Trade talks collapse spells bad news for Africa

- The Independent (UK): EU's Mandelson makes pledge 
  as world trade talks collapse

- Reuters: World trade talks suspended

Agence France-Presse
July 25, 2006

WTO Collapse Set to Fuel Asia's "Noodle Bowl" Effect

The breakdown of the WTO talks is likely to encourage the further 
proliferation 
of bilateral free trade pacts in Asia that have raised concerns about a 
"noodle 
bowl" of overlapping rules, analysts said.

East Asian nations have already been rushing to negotiate individual 
agreements 
to remove barriers to trade, apparently on the expectation that the 
149-nation 
World Trade Organization talks would flounder, they said.

WTO chief Pascal Lamy's decision to recommend an indefinite suspension in 
the long-faltering Doha round negotiations is therefore expected to lead to 
the 
further rise of bilateralism in Asia and around the globe.

"The prospect of an intensification of bilateral free trade deals is very 
real if the 
Doha round finally does break down," said Professor Peter Drysdale at the 
Australian National University in Canberra.

East Asian nations' trade with North America and Europe, particularly in 
finished goods, has been growing even faster than intra-regional commerce, which 
is 
largely in intermediate goods and components, he said.

"So a retreat to negotiation of more narrow bilateral arrangements is not 
good 
news for the East Asian economies and the hope is that if the round does 
stall, 
it won't be put on hold permanently," said Drysdale.

The Asian Development Bank has already warned that the mushrooming of 
bilateral free trade agreements (FTAs) risks creating an "Asian noodle bowl" 
of overlapping rules that could actually make life harder for companies.

"Most Asian governments were prepared for the (failure) of the WTO talks," 
said Martin Schulz, an economist at the Fujitsu Research Institute.

"This is why the FTA talks (in Asia) have been in full swing over the last 
couple 
of years," he added.

Japan in particular has been pushing for more FTAs around the world to secure 
access to raw materials and markets for its exports, and has already signed 
deals with Malaysia, Mexico and Singapore.

It has also struck basic accords with Thailand and the Philippines and 
launched negotiations with South Korea, Indonesia, six Gulf kingdoms, Chile and the 
Association of Southeast Asian Nations (ASEAN) as a whole.

"Japan will continue actively pursuing FTA accords with as many countries as 
possible," a trade ministry official said Tuesday.

"But the importance of the WTO talks remains unchanged. Bilateral and 
multilateral talks are just like a pair of wheels. We will try to expand talks on 
FTAs and the 
WTO equally," said the official, who declined to be named.

South Korea for its part has held FTA talks with the United States but the 
negotiations have stalled.

The breakdown in the WTO Doha round could also encourage the development 
of an East Asian free trade pact but diplomatic frictions between the 
region's economic powerhouses will make a deal difficult, analysts said.

ASEAN aims by 2015 to abolish tariffs under a regional free-trade deal.

"But ASEAN is rather insignificant -- that's the problem," said Schulz.

"What they need is an FTA of ASEAN-Plus-Three with China, (South) Korea 
and Japan in the group (but) since Korea, China and Japan are not talking at 
a 
high level any more, there has not been any progress in this area," he noted.

ASEAN is negotiating FTAs with China, Japan and South Korea, hoping this 
will become a catalyst for a wider East Asian free trade zone -- potentially 
the biggest in the world.

However, relations between Japan and its Asian neighbors have reached a low 
ebb largely because of Prime Minister Junichiro Koizumi's controversial 
visits 
to a Tokyo shrine honoring war dead including some infamous war criminals.

The European Union has also expressed a desire to strike an FTA with ASEAN.

--------------------------------------

The Washington Post
Tuesday, July 25, 2006

Trade Talks Fail After Stalemate Over Farm Issues

Collapse Comes With Finger-Pointing

By Paul Blustein
Washington Post Staff Writer

Nearly five years after setting out to revamp the rules of global trade, the 
World Trade Organization yesterday shelved the effort, dealing a potentially 
lethal blow to a deal that was supposed to boost global economic growth and 
help poor countries in particular.

In a meeting at the WTO's headquarters in Geneva, trade ministers from the 
United States, the European Union, Brazil, India, Japan and Australia said they 
remained hopelessly stalemated on crucial issues of how to lower barriers to 
commerce, with farm trade by far the most contentious problem. A barrage of 
recriminations ensued, as the Europeans and others blasted the United States for 
refusing to cut its farm subsidies more deeply, while U.S. negotiators put the 
onus on the E.U., India and Japan for balking at opening their markets for 
agricultural products.

The discord prompted Pascal Lamy, the WTO director general, to declare a 
"suspension" in the Doha round of trade negotiations, named for the capital of 
Qatar where the talks were launched in late 2001 in a push for international 
solidarity after the Sept. 11 attacks.

Although Lamy and the ministers said they hoped the negotiations might get 
back on track at some point, they put forward no timetable, and some of them 
acknowledged that the collapse of yesterday's meeting could seal the doom of the 
Doha talks.

"Today marks a big failure -- whether it is a definitive failure, only time 
will tell," Marianne Fischer Boel, the European agriculture commissioner, said 
in a statement. She added that although the talks could resume eventually, "to 
be honest, I don't think this will happen very quickly." India's trade 
minister, Kamal Nath, described the talks as "between intensive care and the 
crematorium."

The negotiations had been promoted as a potential boon for the poor because 
the talks were supposed to end in a far-reaching agreement that would give 
developing countries more benefits from the global trading system. Poor nations 
have long complained that their main exports, notably agricultural goods and 
textiles, are subject to high import barriers in rich countries. The poor nations 
have also condemned the big subsidy payments that governments in wealthy 
nations give their farmers because those payments can spur overproduction that 
depresses crop prices for farmers around the world.

Advocates for the poor voiced anger yesterday that the chance for correcting 
such distortions appears more remote than ever.

"The once-in-a-lifetime opportunity to bring about an international trading 
system that is not rigged for the rich and hurting the poor has been put on 
ice," said Raymond C. Offenheiser, president of Oxfam America. "Five years of 
haggling and debating have ended in a sad display of political failure."

The talks had been in deep trouble before, notably after a conclave in 
Cancun, Mexico, that fell apart amid anti-globalization protests, and another 
meeting in Geneva several weeks ago that ended without progress. The outcome 
yesterday marked the first time that the talks have been formally suspended. 
Moreover, it came despite declarations issued at the Group of Eight summit in St. 
Petersburg this month by President Bush and other world leaders. They had 
instructed their trade ministers to go back to the negotiating table with new urgency 
and pledged their determination to bring the talks to a successful conclusion 
this year.

That end-of-year deadline is now unreachable, Lamy and the ministers said 
yesterday, a turn of events that is much more than just a psychological setback.

Bush's authority to negotiate trade deals expires in mid-2007, and Congress 
appears unlikely to extend it given rising skepticism among lawmakers toward 
such trade pacts. So negotiators have been rushing to strike an agreement on the 
main sticking points in the Doha negotiations by the end of this month at the 
latest, leaving barely enough time to fill in the thousands of pages of 
detail for an accord to be submitted to Congress next year. Now that that schedule 
has become inoperative, any resumption of talks may have to wait until after 
the 2008 U.S. presidential election.

"We do not expect to be able to use the current [negotiating authority] to 
enact a Doha round agreement if and when one comes together," Susan C. Schwab, 
the chief U.S. trade negotiator, said in a conference call with reporters.

Schwab and her counterparts said they intended to continue searching in 
coming months for possible ways to break the logjam, and they emphasized their 
continued fealty to the 149-nation WTO, the anchor of the system that has 
underpinned global commerce since the end of World War II. Many trade experts have 
voiced worries that a collapse could weaken the WTO and undermine its authority 
in settling disputes.

The main objective of the participants in yesterday's meeting was deflecting 
blame -- and pointing a finger at other countries.

"The United States was unwilling to accept, or indeed to acknowledge, the 
flexibility being shown by others in the room and, as a result, felt unable to 
show any flexibility on the issue of farm subsidies," said Peter Mandelson, the 
European trade commissioner. Nath, the Indian minister, agreed, and said: 
"Everybody put something on the table except one country who said, 'We can't see 
anything on the table.' "

Schwab took strong issue with that account. She said she saw no willingness 
by other countries to lower import barriers for farmers in a meaningful way, 
and as a result she thought no purpose would be served in offering to cut U.S. 
farm subsidies more deeply.

"It became quite clear as we went around the room . . . that there was no 
'there' there," Schwab said, citing the others' continued insistence in 
protecting "sensitive" and "special" products from tariff cuts.

She said that Lamy, after asking all of the six participants earlier this 
month to tell him confidentially the maximum concessions they would be willing to 
make, had concluded that the gaps in positions were too vast to forge an 
agreement. After the G-8 summit, he made another round of queries to see if 
negotiators' bottom-line stances had changed enough to offer hope. According to 
Schwab, she and Agriculture Secretary Mike Johanns made specific assurances that 
Washington was prepared to move significantly closer to the others.

"But what we saw, what became evident was that several of the others had not 
moved off of positions that they've held for the last four weeks or more," 
Schwab said.

-------------------------------------

Trade talks collapse spells bad news for Africa

By Andrew Quinn

JOHANNESBURG, July 25 (Reuters) - The collapse of global trade talks was bad 
news for Africa, condemning the world's poorest continent to an uncertain 
future of high tariffs and lagging competitiveness, officials and experts said on 
Monday.

World Trade Organization chief Pascal Lamy announced the end of the Doha 
round of talks on Monday after nearly five years of wrangling failed to produce a 
deal.

"This will be negative for everybody, but in different degrees. Everybody 
will lose out. There are those who will lose out more, including Africa," said 
Francois Charlot, a technical adviser at Mali's agriculture ministry.

The talks, which could take months or years to resume, were launched in 2001 
and had been aimed at easing poverty and boosting the global economy -- 
important goals for African countries whose agricultural exports remain largely 
sidelined by high farm subsidies in the developed world.

"Agriculture has been at the center of the negotiations, and that was the key 
to any possible progress," South Africa's chief trade negotiator Xavier Carim 
said.

"For Africa, many of the issues that we hoped to have resolved in this round 
(will) simply be suspended, perhaps for years. We will continue to face the 
current difficulties that we have, and we will miss the opportunity to address 
our developmental concerns. It would not be good."

Africa went into the Doha round pressing for better market access for 
agricultural goods, seen as key to improving the livelihood of hundreds of millions 
of people on a continent where 85 percent of the population live in rural 
communities.

But disagreements over farm policy scuttled the talks, with no breakthrough 
on developing countries' demands that richer nations slash farm subsidies and 
lower agricultural tariffs.

"It is time to have a quiet night and reflect on what has happened. But most 
importantly we need to realize that we should now look to Asian markets and 
China since the big boys (Western countries) are not ready," Erastus Mwencha, 
general secretary of Africa's major trade bloc, the 20-member Common Market for 
Eastern and Southern Africa (COMESA), told Reuters.

NEGOTIATING FOR NOTHING

African officials held hopes for the talks, saying it was only through 
multi-lateral negotiations that the continent would be able to win the broad 
concessions it sought.

Now those hopes appear to be in shambles, leaving African countries facing 
bilateral talks on agreements such as the Economic Partnership Agreements the 
European Union wants to sign with poor African, Caribbean and Pacific countries 
to replace their current blanket preferential access to EU markets.

"Smaller countries ... will be worse off because they cannot bring that much 
clout to the table," said Razia Khan, chief Africa economist at Standard 
Chartered in London.

Some economists said Africa was better off with no agreement than with one 
which did not address its concerns -- leaving at least the hope for improvement 
in future trade talks.

"It is better not to sign a bad agreement because the bad agreement will 
really wipe us all out, but (to) continue negotiating," said Jasper Okello, a 
trade lecturer at the University of Nairobi.

Agriculture accounts for more than a quarter of Africa's exports, and in some 
countries commodity exports such as cotton, sugar and tobacco are the chief 
money-earners.

Chileshe Mulenga, the head of the Institute for Economic and Social Research, 
a Lusaka think-tank, said the talks' collapse would hobble the export 
ambitions of Africa's farmers but could force officials to reform markets closer to 
home.

"There is also need to develop infrastructure such as roads that will 
facilitate trade of agricultural produce within countries and in the region," Mulenga 
said.

(additional reporting by Shapi Shacinda in Lusaka, Ed Stoddard in 
Johannesburg, David Mageria in Nairobi)

-----------------------------------------

The Independent (UK)
Tuesday, July 25, 2006

EU's Mandelson's pledge as world trade talks collapse 

By Geoff Meade, PA 

Europe's Trade Commissioner Peter Mandelson last night vowed not to leave 
poor countries in the lurch after the collapse of world trade talks in Geneva.

He was speaking after the latest effort to reach a deal ended in a bitter 
blame game between America and the EU over farm subsidies.

Trade negotiators from America, the EU, Japan, India, Brazil and Australia 
gathered in Geneva on Sunday to break years of deadlock over the so-called Doha 
Round of global trade liberalisation.

But last night US trade negotiator Susan Schwab made clear Washington was 
making no more farm subsidy concessions. Then she stunned the others by attacking 
the EU, India and Japan for not doing enough.

Yesteray morning when the talks reconvened to see what could be salvaged, 
World Trade Organisation Director-General Pascal Lamy suspended the Round as the 
recriminations began.

Getting negotiations back on track will take months, with no more 
negotiations until at least after the America mid-term elections in November.

Mr Mandelson warned: "We have missed the last exit on the motorway.

"I want to express the profound disappointment and sadness of the member 
states of the EU that the talks are having to be suspended today. This is neither 
desirable nor inevitable. It could so easily have been avoided."

The meeting had been "the best of its kind - until it became the worst."

Mr Mandelson added: "Having been mandated by heads of government at the G8 to 
come together to indicate further flexibility, I felt that each of us did - 
except the United States.

"The US was unwilling to accept, or indeed to acknowledge, the flexibility 
being shown by others in the room and, as a result, felt unable to show any 
flexibility on the issue of farm subsidies."

The cost of failure would be political as well as economic:

"We risk weakening the multilateral trading system at a time when we urgently 
need to top up international confidence not further damage it, and do what we 
can to stabilise the world - not create additional tension and uncertainty."

Agreement on the Doha Round has been one of Prime Minister Tony Blair's top 
priorities, to end world trade tensions which have helped deepen the rift 
between the rich and poor nations.

In return for greater access to western markets for their agricultural 
produce, the developing world would open its markets to manufactured goods.

But developing countries claimed the EU and US were not cutting domestic farm 
subsidies or lowering import tariffs enough to allow them to compete.

America, in turn, wanted swifter and greater access to manufactured goods 
markets in developing countries.

Mr Mandelson defended the EU's record tonight, saying cuts in 
trade-distorting farm subsidies of 75% were potentially on offer: "I only wish the US would 
begin to match what the EU is doing."

He told the World Trade Organisation before flying back to Brussels: "We will 
not allow the world trading system to enter into a period of hibernation. 
Above all we will not allow the poor countries to fall victim of it."

He promised to try to salvage elements of the stalled talks which directly 
affect developing countries, including multilateral "Trade for Aid" deals, and 
duty-free and quote-free trade access for so-called Least-Developed Countries 
(LDAs).

Oxfam blamed both the US and the EU for the failure of the talks:

"These talks are going nowhere because the US and the EU refuse to stop 
dumping by cutting real money from their agricultural support, while demanding that 
developing countries continue to open up their markets" said Celine 
Charveriat, head of Oxfam's Make Trade Fair campaign.

Christian Aid said the lack of a trade deal was a "terrible blow" for the 
world's poor: "It seems that the selfish intransigence of the US and Europe has 
finally wrecked any chance of a successful outcome for these trade talks which 
were meant to help developing countries" said Claire Melamed, Christian Aid's 
senior trade analyst.

But John Hilary, Director of Campaigns and Policy at War on Want, said the 
lack of a deal benefited the poor: "The collapse of the trade talks is good news 
for the world's poor. The deal on the table would have caused great damage to 
developing countries.

"The EU and US must shoulder the blame for destroying the so-called 
Development Round, as they have continued to demand massive concessions from developing 
countries while refusing to set their own houses in order."

CBI Director-General Richard Lambert said the situation was as serious as it 
could be: "The collapse of the talks puts the whole multilateral trading 
system in jeopardy and fuels the damaging protectionist tendencies that are 
increasingly emerging around the globe.

"The collapse is undoubtedly a major setback for UK businesses, but if this 
is allowed to become the final chapter in the story of the Doha Round, it is 
the developing nations that will have lost out the most."

A defiant Ms Schwab insisted Washington was still fully committed to a 
"multilateral" trading system.

But a US Congress mandate to President George Bush to continue talking 
expires at the end of this year - with virtually no time now to agree a trade deal 
and get it ratified in Washington.

-----------------------------------------

World trade talks suspended

By Richard Waddington 
and William Schomberg

GENEVA, July 24 (Reuters) - Global free trade talks, billed as a 
once-in-a-generation chance to boost growth and ease poverty, collapsed on Monday after 
nearly five years of haggling and resurrecting them could take years.

The decision to halt the World Trade Organization's (WTO) Doha round came 
after trading powers failed in a last-ditch bid to overcome differences on 
reforming world farm trade, which lies at the heart of the round.

"Faced with this persistent impasse, I believe that the only course of action 
I can recommend is to suspend the negotiations across the board," WTO chief 
Pascal Lamy told the 149-state body.

Acknowledging suspension could turn into the effective death of the free 
trade negotiations, Lamy said it was up to WTO members to decide when they were 
ready to resume and that this could take "not a little bit of time."

The round, launched in the Qatari capital in 2001, stumbled from the start 
over how far rich nations would go to dismantle their huge farm subsidies and 
open up their markets.

Indian trade minister Kamal Nath, when asked how long the suspension could 
last, said: "Anywhere from months to years."

Fourteen hours of talks on Sunday between the so-called G6 -- the United 
States, the European Union, Brazil, Australia, Japan and India -- yielded no 
breakthrough despite a threat from Lamy to call a halt without progress.

The European Union, Japan, Brazil and India suggested the blame lay with the 
United States. The EU and India said Washington had been demanding too high a 
price for cutting into the some $20 billion it spends annually on farm 
subsidies.

Accusing the United States of "stone-walling," EU Trade Commissioner Peter 
Mandelson said: "Surely the richest and strongest nation in the world, with the 
highest standards of living, can afford to give as well as take."

But the United States was adamant neither the EU nor India had been prepared 
to offer the sort of access to their markets that Washington needs to make a 
deal on subsidies worthwhile.

It has said all along it preferred no deal to one that brought it no new 
business.

"Unfortunately as we went through the layers of loopholes ... we discovered 
that a couple of our trading partners were more interested in loopholes than 
they were in market access," said U.S. Trade Representative Susan Schwab.

Lamy warned that a "failure (of the round) would send out a strong negative 
signal for the future of the world economy and the danger of a resurgence of 
protectionism."

MAINTAIN COMMITMENT

Despite the debacle, all members of the G6 said they remained committed to 
the multilateral trading system and to completing the Doha round, even if they 
could not say how or when the negotiations could be revived.

The crisis recalled a similar breakdown in 1990 during the previous round of 
free trade negotiations -- the Uruguay Round. That round, launched in 1986, 
was only finished in 1993.

The Doha round's suspension could speed up bilateral and regional trade 
deals. The EU has said its priority is Doha but it plans other, more focused deals 
especially in Asia where the United States has been active.

The WTO had been hoping to complete negotiations on the Doha round, which 
also includes complex issues such as services and anti-dumping rules, by the end 
of the year.

But the setback in Geneva left it bereft of a target date and with a host of 
potentially complicating international events on the horizon, including 
several elections and expiry next year of U.S. presidential powers to negotiate 
trade deals.

Brazil's foreign minister said it was important for talks to resume as soon 
as possible and that progress made so far, including a pledge by the EU to end 
farm export subsidies, not be removed from the negotiating table.

"The silver lining is that all those who spoke continue to be committed (to 
the round)," said Celso Amorim. "

Some diplomats expressed surprise that the United States had not made even a 
cosmetic move to cut it subsidies, saying that this could have put more heat 
on the EU.

Industrial tariffs, where Brazil and other big developing countries are under 
pressure, were not even discussed on Sunday.

(additional reporting by Laura MacInnis)

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