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ECONOMICS REPORT - World Trade Talks Break Down as the Group of 4 Fail to Reach Agreement

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This is the VOA Special English Economics Report.

Talks meant to end disagreement over international trade failed to produce results in Potsdam, Germany last week. The European Union and the United States sought to find common ground with Brazil and India on several trade issues. The group has become known as the G-Four in World Trade Organization negotiations. But neither side could agree and talks ended last Friday, two days earlier than expected.

United States Secretary of Agriculture Mike Johanns at World Trade Organization headquarters in Geneva, Switzerland, Friday, June 22, 2007.
United States Secretary of Agriculture Mike Johanns at World Trade Organization headquarters in Geneva, Switzerland, Friday, June 22, 2007.

Brazil and India have been seeking big cuts in aid provided to farmers in industrial countries. The two nations have played the part of spokesmen for many of the least developed nations in the one- hundred-fifty-member W.T.O.

During the talks, the United States offered to limit farm aid, or subsidies, to seventeen billion dollars a year. That is down from twenty-two billion dollars offered in October of two thousand five. But Brazil wants the United States to promise a bigger reduction in farm aid to below fifteen billion dollars. Currently, American farmers receive a total of about eleven billion dollars a year in subsidies.

Indian Trade Minister Kamal Nath blamed the United States' position on farm aid for the failure of the talks. But India wants to protect twenty percent of its farm product import taxes from all or most cuts. United States Agriculture Secretary Mike Johanns said that would leave almost all of India's import taxes in place.

An official at the talks said the EU offered to cut import taxes on its most protected farm products by seventy percent. That is ten percentage points higher than its proposal from October, two thousand five. Products considered especially important would only receive subsidy cuts of twenty-three percent.

The Doha round of W.T.O. negotiations started in November of two thousand one. A main goal was for rich countries to reduce their farm subsidies on important crops like cotton, sugar and corn. In return, developing countries would reduce or end barriers to trade in goods and services from industrial countries.

Now, negotiations of the Doha Round will have to continue in Geneva, Switzerland. United States Trade Representative Susan Schwab said nations want to reach agreement on the Doha development plan. But she admitted that negotiations only among the G-Four nations may not be enough.

And that's the VOA Special English Economics Report. I'm Mario Ritter.

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