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18 July 2007
Brazil, India Lost Opportunity to Advance Global Trade Talks
Other developing countries see importance of WTO deal, U.S. official says
The following letter by U.S. representative to the World Trade Organization Peter Allgeier was published July 17 in The Wall Street Journal and is in the public domain. There are no republication restrictions.
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Brazil, India Walked Away from Superb Opportunity
By Peter Allgeier
Profs. Jagdish Bhagwati and Arvind Panagariya have a fundamental misunderstanding of what transpired in late June at a meeting in Potsdam, Germany, of trade ministers from the United States, the European Union, Brazil and India ("Why the Trade Talks Collapsed," editorial page, July 7). Despite significant U.S. and European agricultural and industrial offers on the table, Brazil and India walked away from the opportunity to make significant progress toward a successful conclusion of the [World Trade Organization] Doha Round. They were unwilling to budge on their high industrial and agricultural tariffs.
The U.S. indicated its willingness to make significant commitments in both manufacturing and agricultural tariffs and subsidies, provided that other countries, particularly the most advanced developing countries, make their own meaningful tariff reductions. On manufactured goods, the U.S. proposal would have resulted in U.S. current tariffs being reduced by an average of 35 percent, while asking Brazil to cut its much higher current tariffs by only 13 percent, and India by less than 15 percent. In agriculture, the disparities in the current level of protection are even more striking, but India has not been willing to reduce that protection even modestly. The U.S. average agricultural tariff is 12 percent, while the global average is 62 percent and India's is a remarkable 114 percent. India's proposal would have a negligible effect on its agricultural sector, as it would shield 86 percent-95 percent of its market.
India and Brazil's participation in the Potsdam meeting signaled the welcome role that emerging markets play in the international trading system. However, their approach spoke of a refusal to share the responsibilities for making international trade work for all nations -- particularly developing countries. It was clear that no matter how meaningful the U.S. offer to reduce tariffs and trade-distorting subsides, India and Brazil were going to insist on more.
Nevertheless, the U.S. remains ready to negotiate a Doha agreement that will increase the free flow of goods and services around the world. Our recent meetings with the 21 developed and developing economies of APEC [Asia-Pacific Economic Council] (which account for nearly 50 percent of world GDP) convince us that many other developing countries understand how critical such an agreement is for their economic growth and development. Let's hope India and Brazil will arrive at future meetings of the world's key trading nations more willing to offer genuinely trade-expanding proposals.
Peter F. Allgeier, U.S. Ambassador to the World Trade Organization, Geneva
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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
