In case of failure to revive global trade talks after World Economic Forum meeting in Davos this week, there are ample chances that legal challenges would be unleashed over existing trade arrangements. True to the fact, a failure of Doha round would give a free rein to costly legal challenges to many trade agreements between countries. Recently, Australia joined a Canadian challenge to U.S. farm subsidies on corn alleging that these subsidies are affecting Canadian farmers immensely.
Australian Trade Minister, Warren Truss, has stated that if the differences on the farm subsidies and tariffs are not being resolved, then the differences would be moved to international courts in coming times. Obviously if Doha round negotiations could not be revived, trade negotiators will be paving the way for lawyers, who would be taking advantage of the expiry of the peace clauses to exploit trade distorting elements of the U.S. and European programs. 
Peace clauses under WTO norms that has helped preventing legal challenges to subsidies bestowed by developed countries on farm export expired at the end of 2003. The United States in recent times faced legal challenges from Canada on trade distorting subsidies given on corn and Brazil over cotton. Analysts are arguing that the U.S. may be trying to reactivate those peace clauses to ward off any legal challenges in the international courts.
According to Oxfam, an international non-government agency, the European Union and the U.S. could face legal challenges from developing countries over $13 billion of what is being perceived as illegal farm subsides.
In the meanwhile, Australia has presented a ‘5 plus 5′ strategy to make a breakthrough in Doha round talks. The proposal urges the U.S. to cut farm subsidies by $5 billion and the E.U. to reduce agricultural tariffs by a further 5 percent over 54 percent signaled by the EU. According to reports, the chief trade negotiator of WTO, Peter Mandelson has rejected the proposal extended by Australia.
The Australian trade minister has said that there not substantial evidence yet that the U.S. is prepared to cut subsidies that would be acceptable to member countries and for that matter even Europeans have not signaled that they are ready to make tariff cuts that are deep enough to achieve a breakthrough in the global trade talks.
