European Union counts the cost of failure to reach deal

EUROPE was today counting the cost of the failure of the WTO Doha round against a background of growing concern over the global economy.

While farmers in most EU countries were jubilant, business and industry were crestfallen and warning that consumers and the economy generally were the losers.

The European Commission estimated a deal would have brought an additional $100 billion (€64bn) worth of trade into the global economy from agriculture to services.

Peter Power, spokesperson for the EU’s chief trade negotiator Peter Mandelson, putting it in an Irish context said: “Ireland would have benefited particularly, since it has 4% of the global service industry — it would have benefited disproportionately to its size”.

IBEC, the Irish employers and business body, was in agreement. “The internationally traded areas of financial, computer and other business services support 296,000 high-quality jobs and account for €50bn worth of Irish exports.

“The absence of a new deal to liberalise trade in services will undoubtedly limit the ability of many Irish companies to expand into new and developing markets,” said Pat Ivory, head of trade and international relations.

Xavier Durieu, head of EuroCommerce representing retailers and importers, said Europe desperately needed a WTO deal at this time. “It would have brought cost savings, predictability and legal certainty for companies as well as the strong stable and enforceable framework needed in our globalised economy.”

Mr Mandelson said he was heartbroken at the breakdown, as they were close to 95% of the way to an agreement.

The EU was pleased that for once it was not being blamed for bringing down an agreement. Responsibility for this lay at the feet of the Americans and Indians in particular who could not agree on conditions for cotton and soya imports.

“We felt that the US did not negotiate enough and the Indians over negotiated. It was quite clear very early on there was very little spirit of compromise and engagement,” said Mr Power.