Son of Doha Down for the Count

A meeting aimed at reviving the moribund Doha round of WTO talks has collapsed:

FRANKFURT: A high-level meeting aimed at salvaging sputtering global trade talks collapsed on Thursday as the United States and the European Union fell out with India and Brazil over plans to slash agricultural subsidies and tariffs.

The four members of the World Trade Organization were trying to break a persistent deadlock that has bedeviled the Doha round of negotiations since 2001: How deeply rich countries will slash the domestic farm subsidies that have distorted trade in commodities like cotton, sugar and corn.

The failure of the talks appears to have defeated the strategy of bringing together the United States, Europe, Brazil and India – a grouping known as the G-4 – to resolve major differences before turning to the entire membership of the WTO, which comprises 150 countries.

Brazil and India, two countries that have assumed a leadership role for much of the developing world, rejected American and European advances as insufficient to warrant opening their markets to more imports of the industrialized world’s goods and services. The United States, in turn, charged that Brazil and India had arrived at the talks, being held in the German town of Potsdam, outside Berlin, with virtually no negotiating flexibility.

Considering that the U. S.’s hot button item in the talks—intellectual property—hadn’t even made it on to the agenda, this isn’t a particularly favorable outcome.

Economist Dani Rodrik, however, doesn’t mourn the unsuccessful apparent end of the round.

Even though we should never underestimate the ability of trade negotiators to resuscitate the dead, we will now likely see the usual hand-wringing about the huge costs of failure to conclude the round and about the losses to the world’s poor nations. In fact, there was little to be gained from Doha, and little to lose from its collapse. Unless that is the U.S. over-reacts and turns the predictions of catastrophe into a self-fulfilling prophecy.

See Dani’s post, too, for an interesting analysis of how the benefits of a reduction in agricultural subsidies for cotton in the United States may be oversold.

Are the agricultural subsidies that are most problematic those for cash crops (like cotton) or food crops? If those for cotton, then the U. S. is, no doubt, the villain of this drama but, as I’ve pointed out previously, if it’s food crops, then the greater issue may be European policy. I’m completely in favor of the U. S. eliminating all agricultural subsidies but could someone explain to me whether eliminating the subsidies on cotton will actually help poor Third World farmers or just rich Third World landowners?

And why isn’t the blogosphere interested in international trade?