U.S., China, India Dispute Leaves Global Trade Talks at Impasse

By Jennifer M. Freedman

July 29 (Bloomberg) -- World Trade Organization talks entered their ninth day as a standoff between India and China on one side and the U.S. on the other threatened to derail efforts to reach a global accord liberalizing commerce.

Progress in the negotiations ground to a halt yesterday as the U.S. accused the two nations of refusing to open their fast- growing markets to foreign competition and snubbing a compromise on agriculture and industrial goods. One of the main sticking points is the trigger for special safeguards, which would enable developing countries to raise agriculture tariffs to protect their farmers in case of a surge in imports.

``There is a real threat to the delicate balance that we achieved on Friday night, and I'm very concerned that it will jeopardize the outcome of this round,'' U.S. Trade Representative Susan Schwab told journalists in Geneva yesterday. ``There's a real risk because those countries are advocating selectively reopening the package.''

WTO Director-General Pascal Lamy and trade ministers from seven key governments that together represent 80 percent of global commerce resumed meeting today in a bid to resolve the impasse. Ministers from some three dozen nations will meet later today.

India and China refuse to accept key elements of a compromise put forth by Lamy three days ago and refined by ministers over the weekend, according to the U.S. India never endorsed the proposal and China is now ``backtracking'' in its support, Schwab said. Under Lamy's proposal, when imports of an agricultural product rise 40 percent, duties can be imposed -- a level India says is too high to protect its farmers.

Trigger Level

India wants the threshold set at 10 percent, a position supported by 100 developing nations that are concerned about the future of their farming industries in light of rising food prices, according to Commerce Minister Kamal Nath.

China also dismissed the U.S. criticism, saying it's made concessions that demonstrate its commitment to a global trade deal and willingness to compromise.

``We have tried very hard to contribute to the success of the round,'' WTO Ambassador Sun Zhenyu said yesterday. It's U.S. rigidity in areas such as sensitive products and trade-distorting farm subsidies that is impeding the talks, he said.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net