Trade powers struggle to save WTO round
Wednesday, 23 July 2008
GENEVA, July 22 (Reuters): The United States, the European Union and emerging economic heavyweights tried again Tuesday to bridge huge differences and unblock a trade deal aimed at delivering a boost to the world's flagging economy.
On the second day of crunch talks at the World Trade Organisation (WTO), delegates were hoping for movement from richer countries to help break the deadlock.
"People are expecting a number today to get the process going," an EU diplomat said, referring to hopes the United States would announce a long-awaited figure for a new ceiling for its farm subsidies.
The week-long negotiations are seen as the last chance to save the seven-year-old Doha round of trade talks before November's US presidential election which would put further talks on ice, possibly for a couple of years.
Billed as the 'development round', the new wave of trade liberalisation is supposed to help poorer countries by opening markets to their exports and reducing rich countries' subsidies.
But the United States and the European Union-both of which have strong farm and industrial lobbies-have called on emerging countries like Brazil and China to offer more.
"I have to say that after (Monday's) meeting I am less optimistic than before," Egyptian Trade Minister Rachid Mohamed Rachid told newsmen after no tangible progress was made.
Failure at Geneva would not only be a blow for trade liberalisation but some analysts say it would also put greater doubt over multilateral talks such as the attempt to find a successor to the Kyoto Protocol on global climate change.
Negotiators are walking a line between trying to move the talks to a conclusion and ensuring they do not alienate powerful lobbies at home. A group of US senators sent a letter to US trade chief Susan Schwab warning her not to give too much.
"At a time when our economy is slowing, there couldn't be a worst time to entertain foreign countries' attacks on our domestic trade laws," said Republican Senator Olympia Snowe, one of the signatories of the letter.
"We are making it clear that the false appearance of progress and momentum is not an acceptable trade-off for weakening our trade laws and damaging our economy," Snowe said, noting Congress would oppose such a deal.
Latest WTO proposals would require the United States to cut trade-distorting farm subsidies to a range of $13 billion to $16.4 billion a year from a current ceiling of $48.2 billion.
The range is above current US spending on subsidies of about $7 billion although the handout figure is low because global foods prices are so high.
The EU is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.
Meanwhile, a bid by the European Union to kickstart crucial trade talks with a new-sounding offer on agriculture tariffs fell flat yesterday with Brazil denouncing the proposal as "gimmickry".
The EU's chief negotiator Peter Mandelson sought to steal the show as ministers gathered in Geneva with claims the bloc had raised its proposed tariff cuts on agricultural products to 60 per cent from 54 per cent.
But developing countries were distinctly unimpressed, with Brazilian foreign minister Celso Amorim telling reporters it was "meaningless... purely statistic gimmickry."
Even Mandelson's fellow EU commissioner Mariann Fischer-Boel said the offer was "nothing new".
French trade minister Anne-Marie Idrac explained later that the difference between the two figures was whether tropical products were included in the tariff cut calculations or not.
"Was there new progress, new percentages? The answer is no. Peter Mandelson this morning had clarified... what technical discussions have come up with-nothing more, nothing less," Idrac said.
Mandelson, the EU's trade commissioner, himself subsequently described the 60 per cent proposal as a "reiteration" of the EU's position.
On the second day of crunch talks at the World Trade Organisation (WTO), delegates were hoping for movement from richer countries to help break the deadlock.
"People are expecting a number today to get the process going," an EU diplomat said, referring to hopes the United States would announce a long-awaited figure for a new ceiling for its farm subsidies.
The week-long negotiations are seen as the last chance to save the seven-year-old Doha round of trade talks before November's US presidential election which would put further talks on ice, possibly for a couple of years.
Billed as the 'development round', the new wave of trade liberalisation is supposed to help poorer countries by opening markets to their exports and reducing rich countries' subsidies.
But the United States and the European Union-both of which have strong farm and industrial lobbies-have called on emerging countries like Brazil and China to offer more.
"I have to say that after (Monday's) meeting I am less optimistic than before," Egyptian Trade Minister Rachid Mohamed Rachid told newsmen after no tangible progress was made.
Failure at Geneva would not only be a blow for trade liberalisation but some analysts say it would also put greater doubt over multilateral talks such as the attempt to find a successor to the Kyoto Protocol on global climate change.
Negotiators are walking a line between trying to move the talks to a conclusion and ensuring they do not alienate powerful lobbies at home. A group of US senators sent a letter to US trade chief Susan Schwab warning her not to give too much.
"At a time when our economy is slowing, there couldn't be a worst time to entertain foreign countries' attacks on our domestic trade laws," said Republican Senator Olympia Snowe, one of the signatories of the letter.
"We are making it clear that the false appearance of progress and momentum is not an acceptable trade-off for weakening our trade laws and damaging our economy," Snowe said, noting Congress would oppose such a deal.
Latest WTO proposals would require the United States to cut trade-distorting farm subsidies to a range of $13 billion to $16.4 billion a year from a current ceiling of $48.2 billion.
The range is above current US spending on subsidies of about $7 billion although the handout figure is low because global foods prices are so high.
The EU is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.
Meanwhile, a bid by the European Union to kickstart crucial trade talks with a new-sounding offer on agriculture tariffs fell flat yesterday with Brazil denouncing the proposal as "gimmickry".
The EU's chief negotiator Peter Mandelson sought to steal the show as ministers gathered in Geneva with claims the bloc had raised its proposed tariff cuts on agricultural products to 60 per cent from 54 per cent.
But developing countries were distinctly unimpressed, with Brazilian foreign minister Celso Amorim telling reporters it was "meaningless... purely statistic gimmickry."
Even Mandelson's fellow EU commissioner Mariann Fischer-Boel said the offer was "nothing new".
French trade minister Anne-Marie Idrac explained later that the difference between the two figures was whether tropical products were included in the tariff cut calculations or not.
"Was there new progress, new percentages? The answer is no. Peter Mandelson this morning had clarified... what technical discussions have come up with-nothing more, nothing less," Idrac said.
Mandelson, the EU's trade commissioner, himself subsequently described the 60 per cent proposal as a "reiteration" of the EU's position.