Critical test for WTO talks

GENEVA – Trade negotiators are entering a critical period in their efforts to wrap up a new world trade agreement by the end of the year.

At stake is a pact to boost trade and growth in a world economy buffeted by financial crisis, as markets open for businesses from food to finance in rich and poor countries. But optimism at the start of the year that a deal could be done soon has faded, as the talks have bogged down in technical details and recriminations among rich and poor countries about who should show the greatest ambition in lowering barriers.Meetings this week on central agriculture and industrial goods will determine whether World Trade Organisation (WTO) mediators can issue revised texts distilling the progress.Those negotiating texts, and a set of talks this week on the services sector, are intended to pave the way for a meeting of trade ministers who would agree the outlines of a deal.”The next two weeks will be crunch,” said a senior diplomat from an export-oriented developing country.European Union trade chief Peter Mandelson said the ministerial meeting had to take place in April to fit in with the US electoral calendar, and the talks in the coming days were crucial to the chances of finding common ground.”I hope they give some hope for convergence but, based on the signals we’ve been receiving in the last couple of weeks, I am not yet hugely encouraged,” he told Reuters on Sunday before discussing the WTO negotiations with EU trade ministers.BLAME GAME Negotiators for the Doha round talks, launched in 2001, have entrenched their positions as they review the latest revisions of the agriculture and industry drafts issued on February 8.The ministerial meeting, flagged in January for around Easter, now looks likely to be in mid-April, if at all.The ministers will take the final political decisions on the headline cuts in tariffs and subsidies, and much of the current negotiation focuses on exceptions that rich and poor countries want to protect politically sensitive industries or crops.Rich countries like the United States say they cannot sell a deal at home involving cuts in farm subsidies if waivers for other states water down market access for their exporters.But poor countries, pointing out the Doha round is supposed to help them in particular, complain they are being asked to do more than the rich.Big agricultural exporter Brazil says rich nations want to keep triple-digit tariffs on some farm products – and even 1 720 per cent on one Japanese import.It is not simply a rich-poor quarrel.Many developing states are also eyeing the prospects of greater trade between them, and rich food exporters like Canada or Australia would like a bigger share of food markets in the European Union or Japan.The EU’s Mandelson said last month the Doha talks faced a big risk of failure.David Woods, a trade analyst and former WTO spokesman, said the mood was grim: “Deep down, people have given up in the sense of expecting a conclusion this year.The cracks are becoming a chasm and people are looking around for whom to blame.”Susan Schwab, the top US trade official, said on Wednesday it was up to advanced developing countries like India and Brazil to contribute and in return, the United States was ready to make a dramatic reduction in its trade-distorting farm subsidies.Schwab says President George W Bush’s administration is determined to conclude a deal this year before it leaves office.But many countries doubt Bush’s ability to sell a deal to Congress and are not putting all their cards on the table, Woods said.Protectionist rhetoric is also rising as Senators Barack Obama and Hillary Clinton fight for the Democratic nomination.”Those who say that American politics is not putting us under pressure, I think are taking a huge gamble with the round,” Mandelson said on Sunday.”I think it’s hard to see how this would be picked up by the incoming administration because they won’t have the same political interest or sense of priority.”Nampa-ReutersBut optimism at the start of the year that a deal could be done soon has faded, as the talks have bogged down in technical details and recriminations among rich and poor countries about who should show the greatest ambition in lowering barriers.Meetings this week on central agriculture and industrial goods will determine whether World Trade Organisation (WTO) mediators can issue revised texts distilling the progress.Those negotiating texts, and a set of talks this week on the services sector, are intended to pave the way for a meeting of trade ministers who would agree the outlines of a deal.”The next two weeks will be crunch,” said a senior diplomat from an export-oriented developing country.European Union trade chief Peter Mandelson said the ministerial meeting had to take place in April to fit in with the US electoral calendar, and the talks in the coming days were crucial to the chances of finding common ground.”I hope they give some hope for convergence but, based on the signals we’ve been receiving in the last couple of weeks, I am not yet hugely encouraged,” he told Reuters on Sunday before discussing the WTO negotiations with EU trade ministers.BLAME GAME Negotiators for the Doha round talks, launched in 2001, have entrenched their positions as they review the latest revisions of the agriculture and industry drafts issued on February 8.The ministerial meeting, flagged in January for around Easter, now looks likely to be in mid-April, if at all.The ministers will take the final political decisions on the headline cuts in tariffs and subsidies, and much of the current negotiation focuses on exceptions that rich and poor countries want to protect politically sensitive industries or crops.Rich countries like the United States say they cannot sell a deal at home involving cuts in farm subsidies if waivers for other states water down market access for their exporters.But poor countries, pointing out the Doha round is supposed to help them in particular, complain they are being asked to do more than the rich.Big agricultural exporter Brazil says rich nations want to keep triple-digit tariffs on some farm products – and even 1 720 per cent on one Japanese import.It is not simply a rich-poor quarrel.Many developing states are also eyeing the prospects of greater trade between them, and rich food exporters like Canada or Australia would like a bigger share of food markets in the European Union or Japan.The EU’s Mandelson said last month the Doha talks faced a big risk of failure.David Woods, a trade analyst and former WTO spokesman, said the mood was grim: “Deep down, people have given up in the sense of expecting a conclusion this year.The cracks are becoming a chasm and people are looking around for whom to blame.”Susan Schwab, the top US trade official, said on Wednesday it was up to advanced developing countries like India and Brazil to contribute and in return, the United States was ready to make a dramatic reduction in its trade-distorting farm subsidies.Schwab says President George W Bush’s administration is determined to conclude a deal this year before it leaves office.But many countries doubt Bush’s ability to sell a deal to Congress and are not putting all their cards on the table, Woods said.Protectionist rhetoric is also rising as Senators Barack Obama and Hillary Clinton fight for the Democratic nomination.”Those who say that American politics is not putting us under pressure, I think are taking a huge gamble with the round,” Mandelson said on Sunday.”I think it’s hard to see how this would be picked up by the incoming administration because they won’t have the same political interest or sense of priority.”Nampa-Reuters