WTO Director Fears Ag Subsidies Will End Doha

Pascal Lamy says Doha round will fail if developed countries don't cut subsidies.

The Doha round may fail altogether if trade-distorting agricultural subsidies aren't cut, WTO Director Pascal Lamy said in a Wall Street Journal commentary Friday.

Lamy opens his comments with a clear warning: "There comes a time in every negotiation where the prospect of failure looms. For the Doha round of global trade negotiations, that time has nearly arrived."

The commentary urges the U.S. and other major players in global trade to be flexible and open to compromise, warning against protectionist impulses. Most importantly, he says, governments must be willing to make significant cuts in trade-distorting farm subsidies.

Lamy specifically points out two pieces of legislation that the U.S. Congress that must pass to ensure American support of the Doha round. First, he says the new farm bill must show a commitment to subsidy reform. He also urges Congress to pass legislation extending the president's ability to negotiate with trading partners, calling a failure do so "fatal" to the Doha talks.

Lamy says other nations must cooperate as well, singling out Europe, India, China, Brazil and Japan. Otherwise, the talks will fail, which he says "will erode the multilateral trading system that has underpinned the global economy for nearly 60 years."

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