Doha Round of trade liberalization talks collapse
Source: James A. Morrissey, Washington Correspondent, textileworld.com Date: 2006-07-11
The collapse of the World Trade Organization’s Doha Round of trade liberalization talks over the weekend leaves the future of textile trade uncertain to say the least. Last week’s discussions were billed as a critical juncture in the negotiations because they were supposed to produce a blueprint for conducting the negotiations. The talks broke down over agriculture issues and there was little or no work done on textiles and other industrial trade issues.
The Bush administration tried to put its best face on the situation, but the Doha Round is in serious trouble.
As the talks broke down, US Trade Representative Susan Schwab said: “We remain fully committed to an ambitious, robust round that opens new markets for the world’s farmers, manufacturers and service providers.” Schwab described the situation as “serious, but not beyond hope,” and said the United States has no intention of giving up hope.
Negotiators never got around to substantive multilateral discussions of manufacturing issues, although there were some bilateral meetings. The basic problem is the less-developed countries do not feel the developed countries are being generous enough with their agricultural offers, which involve tariff cuts and elimination of farm subsidies that often result in over- production and depress farm commodity prices.
The next step will be a round of diplomatic missions to various countries in the hope of getting the talks back on track.
If the Doha Round totally collapses, the US textile industry would win one and lose one. While there would not be a major round of tariff cuts — and the United States would be expected to lower or eliminate its textile and apparel tariffs — the industry would lose a vehicle for getting a worldwide safeguard mechanism that could prevent China and perhaps one or two other countries from dominating the US import market. Textile importers would suffer a serious loss, as they view tariff cuts as an opportunity to liberalize trade and make their overseas sourcing easier and less costly.
Time is of the essence because trade officials believe the round needs to be completed by the end of this year, as President George W. Bush’s trade promotion authority expires in July 2007. After that date, it would be virtually impossible to get a worldwide agreement, as Congress could amend any agreement brought before it, which virtually dooms any agreement.
