Monday, July 3

Six news reports on stalled WTO talks

US alone can lead the WTO salvage mission
DNA India
Sunday, July 02, 2006
"[ . . .] US trade representative Susan Schwab came to Geneva, say sources in the Indian [WTO] delegation, with no mandate to move forward on agricultural subsidies. The huge subsidies the US gives to its farmers enable them to sell their products cheap in the world market, making it difficult for other countries to compete, they add. The last US offer was a 53% cut in these subsidies. In return, it wanted very substantial cuts in agricultural tariffs globally.

"The US’ rigid position stood out from that of the EU, which expressed its willingness to extend tariff cuts from 39% to 50%, provided the former climb down on the agricultural subsidies front. WTO director-general Pascal Lamy, who has the responsibility of salvaging the round lies, will have his work cut out in persuading the US to yield ground. But even assuming he gets some concessions from the US on agriculture, the question of industrial tariffs still remains. The battle for the developing countries will be tougher here, because the US and the EU — at daggers drawn on agriculture — stand together on this. They want a tariff cut formula that will mean developing countries will undertake big cuts, something the latter are not ready to concede.

"If the US makes improved offers on agriculture, it will demand its pound of flesh on industrial tariffs. That will clearly put Nath in a cleft stick, caught between the need to protect agriculture and industry.

"Nath has been making the point that the Doha Round is a development round and is all about increasing trade flows from developing countries to the developed countries, and not the other way around. But it’s not clear if the developed bloc will pay much heed to this."

India expects new talks to break WTO deadlock
Mumbai Mirror Bureau

"[India's Commerce and Industry Minister] Kamal Nath wanted to come back from Geneva two days before the meeting ended as there was no negotiating space at WTO

"New Delhi: “I cannot be in a meet that does not recognise Indian farmers’ need. I had gone to Geneva to see what Indian farmers can get and not what they can give,” Commerce and Industry Minister Kamal Nath said on his arrival here on Sunday after he pulled out of the WTO Mini Ministerial meet as Indian farmers’ interests were not being protected at the meet.

"He, however, hoped for new talks by July-end to break an impasse in World Trade Organisation negotiations which collapsed in Geneva on the weekend. The December 2006 deadline for completing Doha round now seems quite difficult with the Geneva talks collapsing.

"The Minister disclosed that he had decided to return from Geneva two days before the meeting was scheduled to end as there was no point of continuing as the major trade powers failed to make any breakthrough.

“I came to the conclusion that there is just not any negotiating space, because there is really a difference of perception. We could not have been part of any agreement that does not address the development concerns of developing nations,” Kamal Nath told Mumbai Mirror.

"On the US charge that the developing countries were seeking protection for 98 per cent of their products, Nath noted that they were in fact seeking 100 per cent protection for their agriculture and infant industries. It is a period of reflection for developed countries as they could provide leadership to strengthen a multilateral trading system.

"India’s stand has been endorsed by 110 developing countries, which feel that developed countries should give something for the betterment of the developing nations. Nath added, “We want a pact at WTO which increases our economic growth from 8-9 per cent to 10-11 per cent and it cannot subscribe to an agreement that brings it down to four-five per cent.”

"At WTO, the developing countries are demanding greater access to the agricultural markets of developed countries while the industrialised nations want the developing countries to open up their markets for services and industrial goods.

"The talks are stuck because no agreement is in sight on cut in agriculture tariffs and domestic subsidies that developed countries should make so that products from developing countries could enter their markets and compete.

“We could not have been part of any agreement that does not address the development concerns of developing nations”

Poor states ‘let down’ as WTO talks falter
by Mathabo Le Roux
Business Day
"[ . . .] South Africa's chief trade negotiator, Xavier Carim, called the line taken by the US and the European Union (EU) “anti-developmental” and out of touch with the agreement reached at Doha that poorer countries should benefit from the round. “We’re really running out of time,” Carim said. There was, however, a sharper understanding of the critical issues that needed to be breached.

"The key issues that remain are the extent to which the US is prepared to reduce agricultural subsidies and the EU’s standing on the reduction of agricultural tariffs.

“With the EU it is a matter that they say they are prepared to do more, but there is no indication of what that means. It is a very nebulous offer,” Carim said.
The other issue that remains, from a developed world viewpoint, is developing countries’ failure to move on a reduction on industrial tariffs.

"Developing countries are, however, exasperated at the extent of reductions in industrial tariffs demanded by developed countries, with one commentator from the Congress of South African Trade Unions (Cosatu) calling it “a joke”.

"The industrial tariffs were a different dynamic, with developed countries proposing tariff cuts which could be damaging to industrial development in the developing world, Carim said.

"On the table is a demand for tariff cuts of up to 70% on industrial goods, which he called extremely severe.

“It does not compare with what they are prepared to give on agriculture, and in terms of industrial discussions they are offering reductions of 23%. There is complete imbalance.”

"South African trade union representatives who attended the Geneva talks said a commitment on industrial tariffs could have severe implications, preventing SA from formulating and implementing “decent industrial policy” aimed at economic growth and job creation.

“Above all, we feel this must be a real development round, without new demands for concessions from us,” said Cosatu economist Neva Makgetla. “No deal is better than a bad deal.”

"Not all developing countries would lose if the demand on industrial policies was pushed though, said a Cosatu spokesman."

[Australia] PM blames Europe over WTO talks
By Shane Wright
Australia Finance News
July 03, 2006

"PRIME Minister John Howard today blamed Europe for the near collapse of world trade talks, saying it had to go further to slash farm protection levels.

"Mr Howard, who may be dragged into the World Trade Organisation (WTO) talks directly, said it was European intransigence on agricultural protection that was putting the negotiations at risk.

"The leaders of the G6 grouping - Australia, Brazil, India, Japan, European Union (EU) and the United States - may have to involve their leaders in a summit to break the deadlock on the trade talks.

"It follows the failure of world trade ministers to come to an agreement on a framework that would pave the way for cuts in farm subsidies and tariffs, and greatly increase quotas for agricultural goods.

"WTO Director-general Pascal Lamy has been given the job of talking directly to major players during the next four weeks to hammer out some type of agreement. Failure on his part could have the talks, that have already been going for five years, drag on indefinitely.

"Mr Howard said Europe and Japan had so far failed to match the more ambitious proposals put up by the US that would go some way to opening trade in agricultural products across the globe.

"The Americans, to their credit, got the ball rolling, and unless there's an adequate response from the Europeans it won't happen," he told Macquarie radio.

"So I still believe that the big stumbling block is the intransigence of the European Union."

"A recent Organisation for Economic Cooperation and Development report found the EU paid its farmers more than $180 billion worth of protection during 2005 - the most by any developed nation bloc.

"But Mr Howard remained upbeat that despite the major setbacks facing the WTO, the negotiations had not completely collapsed.

"It is critical that we don't allow these talks to fall over, but they'll fall over unless the countries that practice the highly protectionist agricultural policies - and that's the Americans, the European Union and the Japanese - agree to reduce their protection," he said.

"Australian farmers were not so upbeat, with the National Farmers' Federation expressing fears there may not be a deal for some time.

"Federation president David Crombie said that unless the international community worked together, any chance to slash agricultural protection could be lost.

"Because of the lack of movement from the European Union on agricultural-market access and, as a result, no further movement from the United States on agricultural domestic support, precious little has been achieved this week," Mr Crombie said.
"It now looks most unlikely that agreement on a final Doha deal will be reached any time soon - this will be a severe blow to Australian farmers."

"Trade Minister Mark Vaile, who took part in the Geneva talks, said the failure so far to reach a deal could be a wake-up call for the WTO and its 149 member nations.

"You need to have a near death experience to sort of, crack open the door, if you like, to move to the next stage," he told ABC radio.

"The events of the last couple of days and this impasse is what could be loosely called a near death experience."

Call for Lamy to step in after talks stalemate
By Alan Beattie and Frances Williams in Geneva
Financial Times
July 3 2006 03:00

"Leading countries in the Doha round of trade talks have asked Pascal Lamy, head of the World Trade Organisation, to broker a deal between them after a meeting of ministers this weekend was deadlocked from the start.

"The Geneva-based talks, involving several dozen ministers, stalled as soon as they opened on Friday. The US again demanded bigger cuts in farm tariffs while most other countries once more said Washington should first cut farm subsidies, a stand-off that Mr Lamy said would lead to crisis. The talks, planned to continue until today, petered out on Saturday.

"With an end-July deadline for agreeing the size of tariff and subsidy cuts looming, the Group of Six - the US, EU, Japan, Brazil, Australia and India - asked Mr Lamy to mediate between them. Peter Mandelson, EU trade commissioner, scotched rumours that Mr Lamy would produce his own proposed text, saying: "Pascal Lamy should act as the catalyst, but not the author of an agreement."

"Mr Lamy will report back in two weeks on whether a G6 deal is possible. Mr Mandelson said heads of government could also be asked to break the logjam.

"At the weekend Washington was often a lone voice calling for much biggercuts in farm tariffs. Brazil, a prodigious agricultural exporter and usually aUS ally in farm talks, this time put pragmatism and solidarity first, lining up with other developing countries to say that US stubbornness was preventing progress.

"The EU is trying further to isolate the US by reaching an accord on farm tariffs with the influential Group of 20 developing countries, led by Brazil.

"Brussels is privately talking about a 51 per cent average cut in tariffs; its first offer of 39 per cent was widely derided as inadequate.

"The new figure would be close to the G20's proposal, which by most calculations is a 54 per cent average cut but which the EU reckons is 52 per cent. Both are well below the US's call for an average 67 per cent reduction.

"The theatre of combat this weekend involved proposals to let governments protect farm products from across-the-board cuts in agricultural tariffs. Susan Schwab, US trade representative, said the problem was the "three Ss" - the "sensitive" and "special" products on which cuts can be reduced or eliminated, and the "special safeguard mechanism" that allows poor countries to block sudden surges in farm imports.

"A group of more than 40 developing countries, led by Indonesia, want to be able to protect at least 20 per cent of all types of farm products to help their small farmers and rural communities. The US cited a recent calculation by WTO staff that some developing countries with farming concentrated in a few products could protect more than 90 per cent of their actual production. Washington wants them restricted to 1-2 per cent of all types of farm products.

"Mike Johanns, US agriculture secretary, said: "Tariff cuts cannot be undermined by open-ended loopholes."

"Mari Pangestu, the Indonesian trade minister who wants to protect rice growers, said WTO members had already agreed that countries could designate "special products" based on agreed criteria.

"The US cannot tell us what is and is not eligible," she said. "We agreed to an appropriate number of special products, not a limited one."

"The US and EU also continued an arcane squabble about how much the US plan for cutting subsidies would actually constrain American farm spending.

Copyright The Financial Times Limited 2006

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