So finally after seven years of trying, the WTO talks have collapsed once again. If anyone is surprised by this news, that in itself is a surprise.

The leading members of the WTO had differences of opinion which cannot be bridged unless the promoters of the WTO namely the United States and the major European countries are willing to make come compromises.

The reasons for the developing world's apprehensions are easy to comprehend. The WTO is the brainchild of developed countries who could no longer sell all the products they make to consumers in their own countries.

They need growing markets in the developing countries to sell their products. With manufacturing and other jobs moving to cheaper countries the developed countries wanted a slice of that pie somehow or other. Hence the WTO came into being.

The main reason for the failure of the talks was the subsidy given by the U.S. government to American farmers. At US$16.5 billion the subsidy is more than the national budget of many of the member states of the WTO.

Without the subsidy American farm produce will not be competitive. Even within the United States the removal of the subsidies would see a sharp rise in domestic food prices -- something that the U.S. government can ill afford. The recent protests in Korea over the entry of American beef is another example of resistance to the developed countries' efforts to sell their products worldwide.

It is better for the U.S. government to give up its belligerence and start talking to the governments of other countries on a one-on-one basis.

The chances of bilateral trade agreements succeeding are better than a global deal through the WTO. It is not possible to ram trade agreements down the throats of unwilling countries by using the WTO. Very soon the WTO will be as dead as the proverbial dodo.

YASH

Jakarta

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