NEW YORK – The breakdown of the latest round of global trade talks has clearly weakened the multilateral trading system, a system originally designed to offer a fair trade system to all. The collapse of negotiations on July 29th in Geneva, is yet another lost opportunity for creating a more just and fair trading system long promised to poor countries.

The failure of the latest round of talks illustrated a clear lack of political will on the part of rich countries to prioritise development and has resulted in further delaying urgently needed reforms in the international trade system which would have guaranteed resources for poor countries to achieve the Millennium Development Goals (MDGS) by 2015. Yet despite the impasse, there is a recognition that the success of the Doha round based strictly on what was on the table, would have taken poor countries even further away from the sustainable achievement of MDGs. The package under discussion contained a number of elements that would have been damaging for poor countries, particularly in relation to agricultural trade.

Many analysts had hoped that soaring food prices could have been a catalyst for overcoming the farm trade issues, particularly the distortion in global and local agricultural markets that have discouraged production in low-income countries.

On the contrary, the talks stalled largely due to the division between countries with large numbers of poor farmers who wish to protect their farmers in the face of increasing import of agricultural products and the richest countries who were against this proposal.

Civil Society organizations have voiced their disappointment at the collapse of the talks but have supported poor countries for standing their ground. They also felt that decision-making continued to be dominated by a small group of self-selected rich countries and emerging economies leaving out most WTO member countries as mere spectators. Protests by the Africa Group and other poor countries continued to be ignored. Many CSOs felt that as always, for rich countries the collapse of these talks will have little impact. Business will go on as usual. The EU and the US will continue to provide high levels of agricultural subsidies which allow their farmers to over-produce agricultural products at a significantly reduced cost. Farmers in poor countries will continue to struggle to compete with this subsidised production and the excess farm products like chicken, milk and tomatoes which are then dumped in developing countries at uncompetitive prices. A particular concern was that the United States recently passed the contentious Farm Bill which guarantees the continuation of agricultural subsidies to US farmers for the next five years. The value of subsidies and other support to agriculture in OECD countries now runs at $268billion per year, more than double the value of global aid. For poor countries, this failure to reach a deal on global trade will be felt acutely. Farmers in poor countries will not be able to get wider access to certain protected markets, especially those in developed countries. It also presents an increased risk of an intensification of bilateral trade negotiations, from which only industrial countries and the more powerful developing countries can gain. This would create a huge disadvantage for poorer, less powerful developing nations, who are in a considerably weaker position in bilateral trade negotiations. Bilateral trade deals are no substitute to a multilateral trade deal in which smaller nations would be able to negotiate with the superpowers on an equal footing and the poorest countries will almost certainly be excluded from an increase in two-way and regional deals because they have little to offer wealthy nations in return.