Goff says trade talks impasse will cost

The suspension of the World Trade Organisation's Doha Round is a tragedy that means lost potential for New Zealand, Trade Minister Phil Goff said today.

Talks by six major trading countries to save the Doha Round collapsed yesterday after ministers from the G6 group - Australia, Brazil, India, Japan, the European Union and the United States - failed to make a breakthrough.

They had been trying to reach a deal on how to boost trade in farm and industrial goods or risk seeing the round fail.

But the last-ditch negotiations failed to make progress in the key area of farm subsidies, known as domestic support, where the United States has been under pressure to make further concessions.

The US has been blamed by some for the impasse.

But Mr Goff told National Radio none of the G6 countries had shown any flexibility.

There was no point blaming one country or another, he said.

"I think it was a collective failure with the G6. The Europeans needed to give a bit more in terms of market access on agriculture, the United States have to give something more on cutting domestic subsidies."

Brazil and India, the two large developing countries, had to show some flexibility on cutting tariffs on non-agricultural goods -- industrial goods in forestry and fishery.

"Nobody made the movement to put a further compromise on the table.

"So what we've got -- not an end to the talks, it's more a suspension than a total collapse. But what this means in all likelihood is that with no timetable being set for a resumption of meetings, no sign of flexibility, it could be months and therefore the round won't be completed this year and in all likelihood not before the trade promotion authority in the United States runs out.

"There needed to be movement on all sides in the G6, there appeared to be movement on no side."

Mr Goff said concerns about upsetting domestic constituencies had preyed on the minds of negotiators from the US and the European Union Commission.

Countries had more to gain than they would have had to give up, he said.

"So it's tragedy for that reason. Everybody's a loser as long as the talks aren't concluded and in particular the developing world are losers because there are some considerable gains that they can make with the cutting of subsidies, the cutting of export incentives, the cutting of tariff barriers to get access to the wealthy developed countries."

Mr Goff said New Zealand had not lost anything it currently had but it had lost the potential to do well out of the round because "we are an efficient, non-subsidised producer".

"It may well be as valuable as the Uruguay Round which is worth $1 billion a year to us."

Meanwhile, the Employers and Manufacturers Association (Northern) said today the collapse of the trade talks was not likely to mean the end of this Doha round of talks if history were anything to go by.

"While the present impasse is sorted out, New Zealand's negotiation resources will become available for accelerating progress on our bilateral agreements," EMA advocacy manager Bruce Goldsworthy said today.

The WTO achieved huge advances in freeing up world trade in previous rounds, and it remained the only place to resolve international trade disputes, Mr Goldsworthy said.

"It will remain the bulwark against nations backsliding towards insular and self-defeating trade protectionism."

The present impasse should not be read as the end of the world's multilateral free trade forum or the present negotiating round, Mr Goldsworthy said.

The Uruguay round begun in 1986 faced a similar standoff in 1990 but reached completion in 1993.

Prime Minister Helen Clark today told reporters she was very disappointed at the suspension of the trade talks.

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

"For many months now it's been apparent that for the round to succeed you needed movement by three major blocks -- 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."

The single voice of optimism regarding todays' demise of the Doha talks has come from Mike Moore.

Moore, the former Director-General of the World Trade Organisation, thinks the collapse is not as bad as it may first appear.

He says there is always a crisis in these talks, and no trade rounds have ever come in on time.

It is not the end of the game because, he says, it is not possible to collapse the whole WTO concept because of a failure to get down to the nitty gritty.

- NZPA, NEWSTALK ZB