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The collapse of global trade talks for the third time in as many years may be only a bump in the road for world commerce, which continued to expand while negotiations sputtered.
Global markets shrugged off the announcement on July 29 that trade ministers at the WTO in Geneva failed to agree on a plan to cut agriculture subsidies.
While negotiators and some experts depicted the collapse as a setback for the global economy, others said the decades already spent lowering trade barriers, combined with technological innovations and an explosion of bilateral agreements, suggest such predictions may be overstated.
"World trade will be the same as it was before," said Andrew Freris, chief Asia economist at BNP Paribas SA in Hong Kong. "The talks have been going on for 10 years now and aren't going anywhere. There's always going to be an issue of subsidies from the US and European sides."
"In the short and medium term, this won't have any impact at all on trade volumes," said Claude Barfield, a scholar at the American Enterprise Institute, a research organisation in Washington that supports free markets.
Reaching a consensus probably wouldn't have eased prices of commodities such as wheat and soybeans, which have soared to records this year, said Freris at BNP Paribas.
"Had the talks been successful, could the recent jump in food prices be avoided? Unlikely," he said. "Liberalisation of trade of agricultural products doesn't necessarily increase the supply of food."
The deadlock also reflects the growing economic and negotiating might of nations including Brazil, Russia, India and China.
"BRIC countries have acquired strength in the global stage because of their rapid economic growth," said Tapan K Bhaumik, chairman of economic affairs at the New Delhi-based Associated Chambers of Commerce and Industry. "The emergence of regional trade blocs will be the way forward." (Source: Bloomberg)
July 30, 2008
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