Developing powers mull softer stance in WTO talks

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GENEVA, Oct 16 (Reuters) Developing countries such as South Africa, India, and Brazil are mulling a slightly softer stance in the increasingly acrimonious negotiations over a new global trade treaty, diplomats said today.

A discussion paper circulated by India, a copy of which was obtained by Reuters, suggests that emerging economies may accept bigger cuts to their manufacturing tariff caps in exchange for being allowed to shield certain products from competition.

The paper also calls for developed countries to slash their maximum tariff rates more than was suggested in a negotiating text circulated in July by Canadian ambassador Don Stephenson, who chairs the World Trade Organisation (WTO) industry talks.

Manufacturing, called NAMA for Non-Agricultural Market Access in trade speak, is one of the most thorny issues in the beleaguered negotiations over a new WTO liberalisation accord.

The Doha round was launched six years ago in Qatar to boost cross-border commerce in farming, industry and services, and help poorer countries export more. But the talks have bogged down on countries' concerns over exposing their key markets to more competition.

Developing nations sparked sharp rebukes from the United States and European Union last week over their reticence in accepting a range of tariff-ceiling cuts, calculated using numbers known as coefficients, earlier proposed by Stephenson.

The chairman's July text had proposed coefficients of eight or nine for developed countries, and between 19 and 23 for developing countries. Smaller numbers represent deeper cuts to the highest-allowed tariffs on imported shoes, minerals, cars, fuels and other industrial goods.

The new paper from India recommends a developed-country coefficient of five and suggests that developing countries may accept a coefficient of between 24 and 33, depending on the percentage of manufactured products excluded from the cuts.

This, the paper says, would slash average rich-country tariff caps by at least 50 per cent from the current 5.9 per cent average, and also cut the maximum rate in developing countries by about 50 per cent, from an estimated 28.5 per cent average.

The countries making up the NAMA-11 bloc, which also includes Argentina, Egypt and Indonesia, had previously argued for a coefficient closer to 35 for developing nations.

Those emerging powers have said it was unreasonable for them to have to thrust open their young industries while wealthy nations take smaller steps in markets for agricultural goods such as cotton, rice, wheat and soy.

The Indian discussion paper has not been officially endorsed by the NAMA-11 members, and no overtures have yet been made in the ongoing industrial goods' talks, diplomats said.

Negotiations in agriculture -- the other big issue marring prospects for a Doha accord -- are also continuing this week, with diplomats haggling over issues including the size of needed cuts to farm subsidies and tariffs.

New Zealand ambassador Crawford Falconer, who chairs the WTO farm talks, is scheduled to brief the trade body's 151 member states on Friday on progress in those negotiations.

Countries need to reach consensus in all areas of the negotiations to finalise a Doha pact. WTO Director-General Pascal Lamy has urged the speedy conclusion of the talks to avoid spill-over into 2008, when the U S presidential election is expected to make it hard for Washington to negotiate.

REUTERS GL RN1828

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