U.S., EU warn Doha trade talks risk failure

Thu Jun 5, 2008 4:41pm EDT
By Jonathan Lynn and William Schomberg
PARIS (Reuters) - The United States and the European Union said on Thursday the Doha round of world trade talks could collapse because of 11th-hour intransigence by some big developing countries.
The warning comes ahead of a potentially decisive push to end the long-delayed World Trade Organization talks, and could deepen a gap between rich and poor nations.
EU trade chief Peter Mandelson said success in the round, launched in 2001, was vital to solving the global food crisis and prevent the world sliding into job-destroying protectionism.
"Everyone knows that those who are playing it long are playing for failure," he said after meeting trade ministers from other WTO powers in Paris. "Delays will make things harder."
U.S. Trade Representative Susan Schwab said the WTO talks were entering their most critical days since they started.
"None of us alone can carry this forward and it only takes a few of us to make sure the talks stall," she told reporters. "We do not have the luxury of unlimited time -- on the contrary."
Mandelson and Schwab did not name countries risking Doha's collapse but both have said in the past that advanced developing countries like Brazil, India and China are not doing enough. France says it doesn't want to be hurried into a premature deal.
The talks, to boost the world economy and help poor countries export more, have been declared doomed many times.
After nine months of intensive negotiations a deal on agriculture -- vitally important to poor countries and politically sensitive in rich ones -- is within sight which would cut tariffs and subsidies in rich and poor countries while allowing both to shield their most sensitive sectors.
CORE CHAPTERS
But on Monday a WTO mediator gave up trying to narrow gaps on industrial goods, the other core chapter, saying countries were unwilling to compromise on the sector that accounts for the bulk of world trade, in products from automobiles to textiles.
Senior officials from national capitals are due to meet in Geneva next week and WTO Director-General Pascal Lamy said industrial tariffs would be the main focus given the lack of progress there compared with farming.
"We are rapidly approaching the point where the round either moves ahead or dips off the radar screen, perhaps for some time to come," he told a news conference.
But there was a new sense of both urgency and political commitment to complete the deal, he said after trade ministers from the United States, European Union, Japan, Brazil, India, China and other trade powers met in Paris.
The WTO's 152 countries want to end the Doha round this year, before it is overshadowed by change in the White House and the EU's executive Commission in 2009 and elections in India.
To meet the timetable, ministers need to agree on the core areas of industrial and farm goods before Europe's summer break.
Ministers declined to set a date for that meeting because first negotiators need to narrow differences on potentially deal-breaking technical details and start trade-offs between farming and manufactured goods.
"We aren't going to know until we get into this intense engagement whether the rhetoric translates into reality," said U.S. trade chief Schwab.
Trade-offs are key to a deal with developing countries who say they are being asked to open up their markets for industrial goods while rich countries want to shield their protected farm markets from full competition.
Mandelson accused some countries of focusing on agriculture and underplaying industry.
"The fact that we talk more about agriculture is because agriculture is where the major distortions lie," Brazilian Foreign Minister Celso Amorim said.
Indian Trade Minister Kamal Nath challenged Schwab about the new U.S. farm bill which increases support for American farmers, running counter to efforts in the round to reduce trade-distorting subsidies which many economists say have contributed to the food crisis.
According to a participant in the talks, Schwab replied that a successful Doha package that offered gains to everyone including U.S. business would enable Congress to rewrite the farm bill to bring the subsidies into line with the new deal.
South Africa's Deputy Trade Minister Rob Davies said some rich countries were "beginning to throw their toys out of the cot" over proposals under negotiation on industrial goods.
France, the champion of Europe's farmers, said this week that the WTO should not be hurried into a bad deal.
(Editing by Jon Boyle)