Ministers ready for make-or-break trade talks

Other News Materials 19 July 2008 00:46 (UTC +04:00)

From banana imports to rules for protecting the product names, officials and diplomats were working on Friday on a range of issues ahead of next week's make-or-break ministerial trade negotiations, Reuters reported.

But trade experts said the significance of next week's Doha round talks goes far beyond the detail of tariff and subsidy cuts, signaling the international community's ability to deal with major problems such as the food crisis.

"If governments can't even agree on a trade negotiation I'd like to know what they're going to do in climate change over the next half a decade," World Trade Organisation Chief Economist Patrick Low told a briefing.

WTO Director-General Pascal Lamy called the Geneva meeting, which starts formally on Monday and is set to last a week, to push for a breakthrough in the long-running Doha round.

The talks have missed repeated deadlines since they were launched in late 2001 to open up world trade and help developing countries export their way out of poverty. But negotiators say there is a new sense of urgency, and even optimism, now.

Ministers from about 30 countries aim to clinch the outlines of a deal in the core areas of agriculture and industrial goods next week, to prevent the talks being sidelined by US elections and next year's change in the White House.

Indian Commerce Minister Kamal Nath, arriving late on Thursday for talks ahead of the meeting, said any deal had to address the challenges of three "F's" - finance, food and fuel.

"These three "F's" are the backdrop against which these negotiations are being held," he told reporters.

World leaders from US President George W. Bush to Brazil's President Luiz Inacio Lula da Silva have called for a deal.

A deal will see rich countries like the United States, Japan and EU members open up their markets for food by cutting farm tariffs and subsidies. In return tariff cuts in big emerging countries like India and Brazil will give them more access to markets for industrial goods and services.

Once ministers agree the terms of that framework, negotiators will apply the details in the coming months to thousands of tariff lines, and turn to other areas, from fisheries subsidies to rules for unfairly priced imports.

The question now is whether ministers can overcome the differences that divide developed and developing countries.

France, the European Union's biggest food producer and current holder of its presidency, said the EU had exhausted its scope for concessions in agriculture.

"We have a shared objective, to achieve a rebalancing of the concessions the EU has already made," French Trade Secretary Anne-Marie Idrac told a news conference in Brussels.

EU trade chief Peter Mandelson said he felt EU governments had strengthened his hand in pressing for more concessions from others in the WTO talks.

In the WTO's consensus-driven system each of the 152 members - rising to 153 next week when Cape Verde joins - has a veto.

Poor countries, pointing to the Doha round's development mandate, say they should have to open their markets less than rich countries. Instead they are being asked to expose subsistence farmers and infant industries to competition while rich countries continue to protect their farmers.

Rich countries say they cannot sell a deal at home involving big sacrifices in farm protection unless they can point to real gains in market access in countries such as India and China.

And they say some of the biggest gains would come in South- South trade - developing countries trading with each other.

The conventional wisdom, repeated this week in a WTO report on globalization, is that free trade increases prosperity. It creates both winners and losers, but nations as a whole benefit.

Many non-governmental organizations challenge that view, arguing that the current Doha proposals will expose poor-country farmers and workers to more poverty, and lock developing countries into dependence on the rich.

"It flies in the face of what is being proposed by communities and social movements and takes away the space needed for developing countries to put in place the measures to deal with the crisis," Anuradha Mittal, executive director of the Oakland Institute, a US-based thinktank, told a briefing.

But Lamy, an austere Frenchman and former EU trade chief, argues forcefully for the potential of a Doha deal to reduce distortions in the world trading system to benefit poor countries. In the long term that would boost food supplies, and in the short term it would boost confidence, he says.

"What we can do is give one of the rare signals that there's a bit of good news in the system. I don't see any other front where this is available," he said.