Submitted by 2point6billion.com Blog

The BRIC’s are crumbling the house of international trade. After nine days of tough negotiations, which would have resolved the Doha round of free trade talks, prominent BRIC countries India and China failed to reach an agreement with the United States who refused to compromise over measures to protect farmers in developing countries from greater liberalization of trade.

The failure of the talks underscores what is s likely to be the biggest challenge in coming years to expanding world trade: the reluctance of emerging juggernauts such as India and China to risk their newfound success by offering rich nations greater access to the hundreds of millions of consumers rising out of poverty in the developing world, the Washington Post posted.

While it might be a good sign to see the developing powers stand against the might of the developed world, the failure of the talks on the whole, might not work well for the developing nations as the issue of farm subsidies still rests in favor of the developed nations.

Mari Elka Pangestu, the Indonesian trade minister, told the New York Times the failure of the talks reflected the inability of the rich industrial powers to deal with the growing influence of China, India and Brazil in the global economy.

She complained that what she called “a reasonable request” had been blocked because the United States “is not going to show flexibility.”

“I kept saying ‘No, I don’t agree’ at every point,” Nath said in a telephone interview from Geneva yesterday. “I come from a country where 300 million people live on 1 dollar a day and 700 million people live on 2 dollars a day. So it is natural for me, and in fact incumbent upon me, to see that our agricultural interests are not compromised. You don’t require rocket science to decide between livelihood security and commercial interests.”

“The US and the EU are looking for a scapegoat (for the failure of the talks),” Feng Jun, a Shanghai-based WTO expert told China Daily. “They have offered to cut a little farm subsidy in exchange for a much greater access to developing countries’ markets. And despite the cuts, their farm subsidy would still be very high.”

David Shark, a US trade official, told the WTO’s 153 members that the US had “swallowed hard and accepted” the compromise proposal to open up trade in manufacturing goods and agriculture. But, he said, India rejected the package presented by WTO Director-General Pascal Lamy, and China “backed out of the terms it had committed” to last week. “Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life.”

Some analysts said the spread of free trade for now is likely to shift toward more modest bilateral agreements, or the expansion of regional trading blocs such as South America’s Mercosur and the Association of Southeast Asian Nations. Yet even bilateral deals have recently faced stronger resistance during a growing global wave of protectionism, including in the United States, where free trade agreements with Colombia, South Korea and Panama are being held up by opposition in Congress.