Trade talks a let-down for Clark

Prime Minister Helen Clark is disappointed that world trade talks have been suspended, but says it is yet to be determined whether some gains can be made.

The World Trade Organisation (WTO) Doha Round of trade talks were put on hold after last-ditch negotiations collapsed.

When negotiations by the G6 group - Australia, Brazil, India, Japan, the European Union and the United States - failed to make progress in the key area of farm subsidies, WTO Director-General Pascal Lamy suspended the talks.

Helen Clark said: "It's clear that there are major players who needed to move and didn't move and that's very disappointing to us.

"For many months now it's been apparent that for the round to succeed you needed movement by three major blocs - the EU, the US and the G20 represented by India and Brazil in the group of six.

"The reality is none of the big three has moved enough."

She said it was not yet known whether what was previously agreed at talks in Hong Kong - where there were more specifics about phasing out export subsidies - could be realised.

New Zealand would work towards getting people to "hang in there", lock in gains already made, and take a fresh approach to the round.

Trade Minister Phil Goff said failure of the round meant the "whole world loses".

The round held significant potential for New Zealand but was crucial to the developing world.

Mr Goff said New Zealand would continue to pursue bilateral trade agreements, although the WTO was critical.

The Government was pursuing a trade agreement with China and Asean, and it would work to see what it could do through Asia Pacific Economic Co-operation (Apec).

New Zealand supported Japan's initiative that the East Asia Summit could be the basis for a wider, regional free trade agreement.

Failure to reach accord

What were the talks about?

Some of the world's biggest trading nations wanted to reach an agreement on rules for freer international trade. It required big compromises - the United States had to cut the subsidies it pays farmers, Europe needed to open up its markets to agriculture and countries such as Brazil and India were under pressure to drop tariffs on industrial goods.

Was there much in it for New Zealand?

Yes, although how much would have depended on the deal. The Government estimates the last round of World Trade Organisation talks - known as the Uruguay round - was worth $1 billion to New Zealand every year because it increased our ability to sell goods such as dairy products overseas.

Why did this round fail?

Each side blames the other. The US claims Europe refused to budge on market access. The EU says American farm subsidy cuts did not go far enough.

What happens now?

Any chance of an improved deal has probably disappeared because the US President's power to approve one expires by the middle of next year. After that, the US Congress is considered even less likely to agree to measures which would hurt American farmers. Some analysts worry that the stalemate will lead to the creation of regional trading blocs, which may exclude New Zealand.

- NZPA