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WTO Impasse May Aid Free Trade Talks

Posted July. 26, 2006 03:01,   


The Doha Development Agenda (DDA), the multi-party ministerial trade negotiation which has been held by the World Trade Organization (WTO) since 2001, is going through a crisis.

After the talks between G6 (Group of Six) countries including the U.S., Japan, Australia, India, Brazil, and the EU (European Union) collapsed, the director-general of the World Trade Organization, Pascal Lamy announced that the trade negotiation will be suspended “until new opportunities come up.”

This round of cabinet-level DDA talks between the G6 nations were widely viewed as the last chance for a compromise, because at the recent G8 (the seven most-developed industrial nations and Russia) summit held in Russia, a consensus that there is a need for a “political will” to save the talks was reached. The deadline of the DDA, which was initiated to lower trade tariffs, was planned for 2003. The deadline was continuously missed because participating nations disagreed on many issues, including the extent of agricultural market opening and subsidies. For Korea, a nation that is heavily dependent on trade for its economy, the halt of the DDA talks imposes difficulties on increasing exports. This will subsequently give the Korean government a reason to focus on bilateral FTA (Free Trade Agreement) negotiations, including the Korea-U.S. FTA.

But some speculate that it will be hard for the Korea-U.S. FTA negotiations to gain momentum.

They say that civil organizations opposed to the FTA will be even more vocal in protesting, now that the DDA negotiations have been halted.

Director Bae Jong-ha of the International Agriculture Bureau, Ministry of Agriculture said, “The halt of the DDA negotiations will not have a direct effect on the Korea-U.S. FTA, but it may lead to lowering the level and extent of market opening in the agricultural sector.”

He explains that a significant part of the FTA negotiations would have been based on the result of the DDA negotiations, and the market would have been opened further. However, without a conclusion to the DDA talks to work with, the FTA talks will have to go back to the drawing board.

Suk-Min Hong smhong@donga.com