Doha trade deal is within reach: IMF's Rato

MELBOURNE, Nov 18: A sweeping deal on world trade is within reach and political leaders face a major responsibility to bridge differences to conclude the Doha round of negotiations, the International Monetary Fund chief said today.

Failure to do so would add to protectionist pressures and threaten a favourable world economic outlook, IMF Managing Director Rodrigo Rato said at a news briefing as the Group of 20 financial leaders began meeting here.

''There is still room for a swift conclusion of the Doha Round,'' Rato said.

The talks foundered in July in acrimonious disputes over subsidies and market access. Time is running out to jumpstart the round before the United States president next July faces losing ''fast track'' negotiating powers, meaning any deal would be subject to scrutiny by the US Congress.

Key to reviving Doha is how much the United States will cut farm subsidies, how much the European Union will lower tariffs on farm imports and export subsidies, and how much developing countries will reduce barriers to imports.

G20 finance ministers and central bankers, who represent the bulk of the global economy, frequently warn against protectionism and have urged progress on Doha, so far to little avail.

Rato said the EU, the United States and Japan had a responsibility to strike a deal and developing countries also had an important role to play.

''When we look at what has been achieved already in the Doha round, we can see what has been achieved is very substantial. And when you look at what is needed to craft a deal, the differences are not so big any more,'' he said.

''So this is a very clear case of political leadership to overcome those vested interests,'' he said.

The Bush administration says it won't improve offers to cut subsidies until other countries offer bigger tariff cuts.

But the United States may have a window of opportunity to strike trade deals as a newly elected, Democrat-controlled Congress is keen to show voters it is willing to do business and avoid gridlock in Washington.

A senior World Trade Organisation official warned last month there was a strong chance Doha would fail completely and WTO head Pascal Lamy said the current focus on bilateral and regional accords risked distracting countries from striking a global deal.

REUTERS