KEY POINTS:
The collapse yesterday of World Trade Organisation talks aimed at liberalising international trade has pushed a billion-dollar prize out of New Zealand's grasp and left business leaders bitterly disappointed.
Tim Groser, National trade spokesman and former World Trade Organisation chairman of agricultural negotiations, said a deal could have been worth about $1 billion a year to New Zealand.
The talks in Geneva ended after nine days of ministerial-level bargaining because the United States and developing countries, led by India, could not agree on a mechanism that would allow countries to protect farmers when there were surges in agricultural imports.
However, Groser said it would be deeply damaging to New Zealand's interests to start playing a blame game and he was a long-term optimist.
"This is the eighth round of multi-lateral trade negotiations since the war, not one of them has gone well and not one of them has failed," he said.
The key was to not backtrack on progress made during the negotiations.
"It's extremely difficult to move forward but the system is very sophisticated in avoiding going backwards," he said.
Negotiations could be restarted during the last quarter of next year.
"If we get momentum it'll take another six months beyond that," he said. "The best that could be hoped for would be an agreement in the middle of 2010."
The current round of negotiations was launched in Doha, Qatar, in 2001 and was expected to take three years to complete.
Trade Minister Phil Goff said agreement had been reached to eliminate agricultural export incentives, cut and cap domestic agricultural subsidies, cut bound tariff rates on agriculture by at least 54 per cent and reduce tariffs on industrial goods to 8 per cent in developed countries.
"But none of these benefits can be realised until there is final agreement on issues across the board," Goff said.
Fonterra general manager commercial forecasting and strategy Philip Turner was at the talks until Sunday as part of the New Zealand group.
"There was certainly a sense over the weekend for the first time in some months that maybe this deal was actually doable and it's especially disappointing that despite the momentum over the weekend it has finally collapsed again," Turner said.
"Unfortunately, what appears to have happened is that the political will is simply not there to sign on to the package that the negotiators have virtually agreed."
Federated Farmers of New Zealand president Don Nicolson said food and fibre producers would be disappointed but he was encouraged that 18 out of 20 outstanding issues were agreed on before the talks collapsed.
"Improving the conditions of trade is vital to the international competitiveness and ongoing financial security of New Zealand farming," Nicolson said.
Charles Finny from the Wellington Regional Chamber of Commerce said the deal on the table was far from perfect but a move in the right direction.
"No one member would have been happy with all elements. But it was a package that would have seen everyone better off than they would be without it," Finny said.
"An agreement would have sent exactly the right signals for the current fragile state of the global economy and the breakdown represents a real setback."
The New Zealand International Business Forum also expressed deep disappointment that the meeting had failed to agree on a way forward.
Forum executive director Stephen Jacobi said the failure in Geneva was bad news for New Zealand, the developing world and the global economy.
WHY THE DOHA ROUND MATTERS
* The latest round of trade talks was initiated in November 2001 by the World Trade Organisation in Doha.
* The aim of the round was to reduce poverty by making international trade fairer.
* Reducing the use of tariffs and subsidies for agriculture will benefit New Zealand exporters.
* The last completed round of trade negotiations was dubbed the Uruguay round. It was completed in 1994.
* By 2003 its reforms to agriculture trade were estimated to have added more than $9 billion to New Zealand's economy and created 17,600 extra jobs.
- Additional reporting: agencies
