WTO proposals show trade deal far from certain

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Jonathan Lynn
Big gaps remain in the positions of trade powers and the latest negotiating texts from the World Trade Organisation (WTO) issued late on Saturday show that a new deal to open up global commerce is far from certain.
The new drafts retain many of the compromises reached at a meeting of ministers in July, including a 70 percent cut in the ceiling for U.S. farm supports.
But the chairmen of the core agriculture and industrial goods talks said much work remains on some issues, including the one that ultimately wrecked the July talks -- a safeguard for poor farmers -- and one that threatens to be a dealbreaker this time -- proposals to eliminate duties for some industrial sectors.
That means WTO Director-General Pascal Lamy faces a tough call over the next day or two deciding whether to call a meeting of ministers to seek an outline deal -- known in WTO jargon as modalities -- in the farm and industry talks in the WTO's seven-year-old Doha round to open up world trade.
"We still have a long way to go before the round is concluded and all members are asked to cast their ballot on the final package," Lamy said.
"However the modalities step would send a signal that all WTO members stand united to face the challenges of the current economic crisis. It will confirm that they reject unilateral beggar-thy-neighbour solutions," he said in a statement.
Last month leaders of the G20 rich and emerging nations called for an outline deal in the Doha talks by the end of this year to help boost a world economy heading for its worst crisis since the 1930s.
But many experts say another failed meeting would put back the talks for years and damage the world trading system just as the crisis is fuelling protectionism.
Lamy now has three options, said one senior diplomat from a major developing country.
"One is to go for broke, which is a very risky option. The two texts provide an ideal basis for a second option -- to seem to be going for broke but to settle for less than that eventually, and the third is not to call a meeting at all."
The fact that both texts clearly show where the WTO's 153 members agree and where the differences remain, without glossing over problems, argues in favour of the second approach, he said.
That could allow ministers to go to Geneva, recognise the progress achieved so far and call for continued work on the disputed areas to build on those achievements, he said.
For others, it is time for the leaders to show they mean what they say.
"We all know that the technical stage of the negotiation of agriculture and non-agricultural goods is over. What is basically left is to take the hard political decisions on this critical aspect of the round," said Julio Lacarte, Uruguay's former ambassador to the WTO's predecessor, the GATT, and a participant in all eight previous trade rounds.
Negotiators were poring over the texts on Sunday to see whether they advance the prospects of the Doha talks that have stumbled from one stalemate to another since their launch in the Qatari capital in late 2001.
Lamy may want to talk to the top U.S. trade official, Susan Schwab, before deciding. U.S. lobbyists and lawmakers have been sceptical about calling a meeting that fails to deliver major new business opportunities to U.S. exporters.
On the other hand few people expected the July meeting to make as much progress as it did. --Reuters