WTO chief challenges trade ministers

By Staff
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Geneva, June 28: World Trade Organisation (WTO) chief Pascal Lamy threw down the gauntlet on Wednesday to ministers gathering for a crucial meeting, saying a deal must come in farm and industrial goods or trade talks could fail.

Ministers from some 50 countries -- around a third of the WTO membership -- meet from Thursday under heavy pressure to approve deep cuts to farm subsidies and steeply lower tariffs in agriculture and manufacturing.

''In any negotiation, there is a moment when things become too late. The moment we need ministers to crack the nut is now, not later,'' Lamy told a news conference.

He brushed aside suggestions from the United States and others that negotiators had until the end of the July to close the chapter on farm and industrial goods, the two biggest obstacles in the uphill struggle for a global free-trade treaty.

''I don't think we can postpone any longer. If we were to do that, we would put the project at risk. The time is now ...

Postponing a decision on cuts in subsidies and tariffs is a recipe for failure,'' he declared.

The latest round of talks, launched at the end of 2001, has been struggling from the start with developing countries demanding more access to rich-power farm markets while resisting U.S. and European Union calls for them to lower duties on industrial products.

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Lamy has long said any deal involves movement in what he called a ''triangle'' -- with the United States agreeing to further cuts in farm subsidies, the European Union in farm tariffs and leading developing countries in protection for their manufacturers.

Washington, which has offered to drop the ceiling on its farm subsidy programme by 60 percent, has firmly refused any further concessions without a big offer from the EU and others on tariffs that will let U.S. farmers sell more abroad.

The EU and other critics say this will let the United States keep subsidy spending at current levels of over billion.

Brussels has indicated it could move, but not as far as the average 54 percent cut demanded by the Brazil- and India-led G20 group of developing nations. The Americans want over 60 percent.

And on industrial tariffs, Brazil has offered to accept a so-called ''Swiss 30'' formula which cuts tariffs across the board and leaves 30 percent as the top rate.

Both the Americans and Europeans want a ''Swiss 10'' percent for rich and a ''Swiss 15'' percent for poorer countries.

Without a deal soon, negotiators will run out of time to conclude all the intricate detail and settle a host of other issues by the end of the year, which is the cut-off because U.S.

presidential powers to negotiate on trade elapse in 2007 and are unlikely to be renewed by Congress.

For the first time, Lamy, a former EU trade chief who will chair the talks, said he had an ''intuition'' for how an accord could be struck.

He said the G20's proposal on farm tariffs below billion for U.S. subsidies could be part of the answer.

The talks kick off with various bilateral and group sessions ahead of the first WTO meeting scheduled for Friday, at which Lamy said delegates must strip away rhetoric and start crunching numbers.

Reuters

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