Global trade talks falter

The key to the global trade discussion has been a lowering of agricultural subsidies in the developed countries with a corresponding decline in tariffs in developing countries. The key has been bilateral talks between the US and EU on the developed side and India and Brazil representing the growing power of developing nations. It was believed that a brokering of a deal between the G4 would lead to further agreement with the rest of the countries in the WTO. No such luck.

This lack of agreement is especially troubling given the fine shape of the world economy. With growth strong around the world, there would be less impact from an increase of competition. Also, since farm prices are at the highest level in a decade, there impact of reducing subsidies for farmers would be less costly. We will have to hope that a new farm bill will allow these talks to again resume. Movement from the US could also force the EU to reevaluate their agricultural policy position.