EU doubts WTO deal, attempts to save face

BRUSSELS/GENEVA, Apr 20 : The European Union on Thursday all but admitted that global trade negotiations would not meet an end-April deadline for a key deal as trade diplomats tried to soften the blow of their latest failure.

A European Commission spokesman said it would be ''exceptionally difficult'' for the Geneva-based World Trade Organisation (WTO) to meet the target for a pact on farm and industrial goods, cornerstones of the Doha trade round.

With just days to go, the differences between rich and poor states over import tariffs and subsidies remained too wide, and no one seemed ready to make the politically difficult compromises needed for a deal, Geneva diplomats said.

''The end of April deadline will be exceptionally difficult to meet,'' Commission spokesman Peter Power told a news briefing in Brussels.

In Geneva, a senior U.S. farm legislator went further, saying that no agreement would be reached this month.

''We have had a series of discussions about where we are. It is clear to me that the April 30 deadline will come and go without significant agreement,'' Republican lawmaker Jerry Moran, chairman of the House Agriculture subcommittee, told journalists in Washington by telephone.

The deadlock leaves the WTO facing an awkward decision over what to do about plans to summon trade ministers to the Swiss city at the end of the month if they will not be in a position to strike any major deal.

WTO Director General Pascal Lamy, who at the end of last month said it would be a ''huge mistake'' to miss the April deadline, will call in ambassadors from some 25 key WTO states late on Friday to take a decision on whether the ministerial meeting should go ahead, diplomats said.

''The political question that needs to be answered is: is it better to go ahead with the meeting if you are unsure of the result or postpone for a couple of weeks and have a greater chance of a result,'' Power said.

Diplomats said opinion was divided on the wisdom of a ministerial gathering at a meeting on Thursday of the so-called G6, Brazil, India, the European Union, the United States, Australia and Japan, which has taken the lead in trying to reach a deal in agriculture.

But even if the ministers do not come, WTO countries will still have to spell out how they intend to generate the momentum to conclude the round in the next few months.

''We are still discussing just how we are going to handle the fact that another deadline will be missed,'' said one diplomat from a Latin American country in Geneva.

The Doha round, launched in late 2001 with the aim of boosting the global economy to lift millions out of poverty, should have finished in 2004.

The talks, which also include services and a host of other issues, cannot drag on beyond July or there will not be enough time to finalise all the detail before U.S. presidential powers to negotiate trade deals elapse in 2007, diplomats say.

In Washington, International Monetary Fund chief Rodrigo Rato warned that failure to conclude the round would be a blow to the world economy. ''It would be a very important missed opportunity,'' he said.

Discussions are continuing this week in Geneva on both agriculture and manufacturing, and on Thursday the United States put forward proposals on one aspect of the farm goods talks -- how to deal with products the EU wants to shield from the deepest tariff cuts.

But there was no sign of movement on the key stumbling blocks, diplomats said.

These are how far the EU is prepared to go in opening up its heavily protected farm market, what more can the United States give on farm subsidies and what level of cuts in industrial tariffs can the better-off developing countries live with.

REUTERS