Prospects brighten for revival of Doha Round talks

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From Fazle Rashid
NEW YORK, Nov 24: Coinciding with the announcement of the appointment of Tim Geithner to the all important post of the Treasury Secretary, President-elect Obama will unveil today his economic rescue plan to retrieve the country's economy caught in the quicksand. The core element of his rescue package will be "holding off of new taxes " for next two years. No specific amount has been cited but the rescue package would run into hundreds of billions of dollars.
Meanwhile, Federal regulators approved a radical plan to stabilise Citigroup in an arrangement in which the government could soak up tens of billions of dollars in losses at the struggling bank, the New York Times (NYT) in a report said today. The government would provide coverage to bank's loans amounting to $306 billion and directly invest $20 billion. The Standard Chartered, the British bank will issue shares worth $3.0 billion to boost's capital reserve and to ease the concerns of the investors about its ability to weather the severe economic downturn.
This was the third US government effort in as many months to contain the deepening economic crisis and may set precedent for other multibillion dollar financial rescue. This was reversal of government stand of not buying toxic assets any more. Banks declining fortune is linked with the total collapse of the US auto industry.
Over the past three years the auto industry's fortunes darkened and big banks like Bank of America, JP Morgan Chase and Citigroup helped automakers sell more than $56 billion of new debts securities. Citigroup lost more than half of its value last week. Shares in other banks like JPMorgan Chase and Bank of America also lost significant ground.
In another development, the prospects for revival of the-stalled Doha Round of Talks looked bright in the midst of deepening economic gloom and the panic it has created worldwide. At the end of a meeting of the World Trade Organisation (WTO) in Geneva, US representative to WTO Peter Allgeier said there was a high possibility of Doha Round of Talks resuming next month. Some progress has been made on setting goals for negotiations. Such a gathering would in effect be the last chances to agree an outline deal in the seven year old talks.
Heads of the government of the Asia-Pacific Economic Cooperation (APEC) including the outgoing US president Bush issued a statement urging ministers to meet in Geneva next month to revive the Doha round hoping that the talks will roundup with ambitious and balanced result. Business leaders from US and Europe warned not to rush with the ministerial meeting if that fails to deliver substantial new export markets.
The US, EU, Brazil and Russia are to join other members of the Organisation of Economic Cooperation and Development (OECD) in pledging support for export credit to ensure liquidity. Saudi Arabia announced Sunday a cut in interest rate for the third time in six weeks and eased reserve requirements as a part of government's effort to help the financial market cope with tight liquidity. Saudi Arabia has a hard currency reserve of $500 billion and is the richest among the regional countries.