No hope for trade talks: Lamy

GENEVA – Global free trade talks risk total failure and their collapse would erode faith in the multilateral system on which international commerce depends, the head of the World Trade Organisation (WTO) warned on Friday.

“Time is short and the stakes are high,” WTO Director-General Pascal Lamy wrote in an editorial in the Wall Street Journal. The WTO’s Doha round was suspended in July after nearly five years of negotiations because of seemingly insurmountable differences over agriculture and that suspension could become permanent without progress by early next year, Lamy said.”There comes a time in every negotiation where the prospect of failure looms.For the Doha round of global trade negotiations, that time has nearly arrived,” he wrote.Although accounting for less then eight per cent of world trade, agriculture remained the ‘Gordian Knot’ that had to be cut for a deal to be reached across the talks, which range from industrial goods to services and new rules on the environment and dumping.The United States must offer further cuts in farm subsidies, while the European Union and Japan and leading developing countries such as Brazil, India and China would have to make trade concessions too, according to Lamy, who is currently in Washington to meet top US trade and agriculture officials.Reforming agriculture was always politically difficult but what separated them was not that much, just a few billion dollars of farm subsidies and a few percentage point cuts in average farm and industrial tariffs.”Compare that to what we all stand to gain,” Lamy said.What had already been agreed since the WTO talks were launched in Qatar in 2001, in agricultural and industrial reform, services, cuts to environmentally harmful fishing subsidies and slashing red tape and corruption was already more than achieved in any previous trade round, he said.”Even by the most conservative measure (this) …surpasses anything agreed on (at) a trade round before.”The successful conclusion of the round offered an “insurance policy” against protectionism and economic nationalism of the sort that helped trigger World War Two, he added.”Like a progressive malady, a failure in the global trade talks will erode the multilateral trading system that has underpinned the global economy for nearly 60 years,” he wrote.But the WTO had only a “few months left” to rescue the talks before the US Congress turns its attention to two pieces of legislation that – depending on which way they go – could sound the death knell for the global negotiations.The US legislature must review farm budget spending.It must also decide whether to extend special powers allowing President George W.Bush to reach trade deals.Without those powers, it becomes almost impossible for the United States to negotiate international trade pacts because Congress can demand to be consulted every step of the way.”By the early (northern) spring, negotiators in Geneva must advance the negotiations sufficiently to inspire Congress to pass laws that support the talks,” Lamy wrote.Nampa-ReutersThe WTO’s Doha round was suspended in July after nearly five years of negotiations because of seemingly insurmountable differences over agriculture and that suspension could become permanent without progress by early next year, Lamy said.”There comes a time in every negotiation where the prospect of failure looms.For the Doha round of global trade negotiations, that time has nearly arrived,” he wrote.Although accounting for less then eight per cent of world trade, agriculture remained the ‘Gordian Knot’ that had to be cut for a deal to be reached across the talks, which range from industrial goods to services and new rules on the environment and dumping.The United States must offer further cuts in farm subsidies, while the European Union and Japan and leading developing countries such as Brazil, India and China would have to make trade concessions too, according to Lamy, who is currently in Washington to meet top US trade and agriculture officials.Reforming agriculture was always politically difficult but what separated them was not that much, just a few billion dollars of farm subsidies and a few percentage point cuts in average farm and industrial tariffs.”Compare that to what we all stand to gain,” Lamy said.What had already been agreed since the WTO talks were launched in Qatar in 2001, in agricultural and industrial reform, services, cuts to environmentally harmful fishing subsidies and slashing red tape and corruption was already more than achieved in any previous trade round, he said.”Even by the most conservative measure (this) …surpasses anything agreed on (at) a trade round before.”The successful conclusion of the round offered an “insurance policy” against protectionism and economic nationalism of the sort that helped trigger World War Two, he added.”Like a progressive malady, a failure in the global trade talks will erode the multilateral trading system that has underpinned the global economy for nearly 60 years,” he wrote.But the WTO had only a “few months left” to rescue the talks before the US Congress turns its attention to two pieces of legislation that – depending on which way they go – could sound the death knell for the global negotiations.The US legislature must review farm budget spending.It must also decide whether to extend special powers allowing President George W.Bush to reach trade deals.Without those powers, it becomes almost impossible for the United States to negotiate international trade pacts because Congress can demand to be consulted every step of the way.”By the early (northern) spring, negotiators in Geneva must advance the negotiations sufficiently to inspire Congress to pass laws that support the talks,” Lamy wrote.Nampa-Reuters