The FT attempts to describe how this morass of trade rules complexity has hit the rocks (Note: deliberate mixed metaphor). See also this.

When one has worked in Diplomacy for as long as I have, one realises just how little one knows.

So on this subject I have primitive instincts/prejudices in favour of ‘free trade’ as opposed to eg ‘fair trade’. But if asked to write a succinct and sensible two-page essay on how world trade talks work, I could not do so.

Obviously some of it is about what actually happens, and some of it is about what might happen, and how different ‘safety nets’ can be used in case of things going ‘wrong’ (NB not easily defined what that means) on a local level.

Plus a lot depends on the individual power of specific national and international lobbies, with US elections and no doubt many others round the world looming.

And predicting what any deal will mean in practice with oil and food prices in such a state of flux round the world is next to impossible

Thus from the FT:

The US created some momentum last Tuesday by proposing to reduce its allowable ceiling for farm subsidies to $15bn (€9.6bn, £7.5bn). The figure was a couple of billion dollars below Washington’s previous offer and much less than existing limits of $48bn, though – as Brazil and India promptly pointed out – about twice its current actual spending.

It appears from this that the US slashed its farm subsidy safety net in this area from a potential $48bn to a measly $15bn. Pretty generous, huh? But Brazil/India pointed out that in fact the US was spending only some $7bn, so keeping the safety net at double that was suspicious.

See also this:

The US, with covering fire from some developing world agricultural exporters such as Uruguay, insisted that India and China open their rice and cotton markets; India and China, backed by other heavy hitters such as Indonesia, said that the US was asking them to sacrifice too much.

It does not sound from this as if the USA is going to be noisily blamed for this trade round failing. China and India as fast developing economies want to have their rice cakes and eat them – they want maximum freedom to export and maximum options to protect their domestic base. Nothing surprising there, but other developing countries might think that with the success they currently are enjoying they might take a few more ‘risks’.

It is all horribly complicated. Business Standard:

The battle to conclude negotiations for Doha in agriculture and market-opening for industrial products broke down due to unbridgeable differences between India and the United States over the trigger and remedy for using the Special Safeguards Mechanism (SSM) by developing countries to check sudden surges in imports of vulnerable farm products.

After 12 days of intense negotiations, Commerce Minister Kamal Nath and his US counterpart US Trade Representative Susan Schwab failed to agree on a figure for using the SSM.

India proposed that if imports cross 115 per cent over a base period, it should be allowed to impose safeguard duties that are 25 to 30 per cent over its bound duties on products taking zero cut.

Uuurgh. How far in all that are they talking about things likely to happen in real life, as opposed to mere potentially destabilising possibilities? How many special interests stand to benefit corruptly round the world from the jungle of local rules needed to make such detailed provisions work?

Finally, the human factor. These articles bring out that the personalities of individual negotiators count for a lot, as does the guile or otherwise of the person leading the process, here WTO DG Pascal Lamy. He gambled that he could close some well known large gaps, and (says the FT) lost.

What next?

All being well that the main players will go off and lick their wounds for a few months without rocking the global trade boat too much in the meantime.

Then try again.

And hope that in the meantime those who lose out from rather less globalisation (ie the very poor) don’t perish on a scale and in a way which allows anyone involved in these talks to be blamed.