US, EU scramble to revive Doha Round trade deal

Washington, Jan 9: President George W Bush and European Commission President Jose Manuel Barroso said it was urgent the world's two largest trading partners resolve differences that have blocked a global trade deal.

''We talked about the importance for Europe and the United States to resolve any differences we have when it comes to the Doha Round,'' Bush told reporters yesterday after meeting with Barroso.

Barroso and EU Trade Commissioner Peter Mandelson met with top US officials yesterday in the latest attempt to revive the ill-starred Doha Development Round, launched in 2001 with great hopes for helping the world's poorest nations.

The world faces a ''moment of truth'' for the Doha round and the multilateral trading system, Barroso said after meeting with Bush, urging negotiators to break the impasse soon.

If that moment slips by, ''we risk losing all the substantial benefits now on the table. It it too important to fail; we cannot fail,'' he told reporters later in the day.

Since the round's collapse in July, negotiators have forged ahead with quiet, lower-level discussions on a deal, which would slash tariff barriers and eliminate some subsidies. But it's still unclear whether those talks will push the round toward a successful conclusion any time soon.

While Barroso said both leaders were ''unequivocal'' in their intent to conclude the round successfully, Barroso pointed to the need for resolve from other major players, such as emerging market powerhouses India and Brazil, to move ahead.

Time is short. Many Doha supporters fear the round could be put on hold for years if negotiators can't clinch a breakthrough by March, a few months before the White House's trade negotiating authority expires.

From the beginning, agriculture has been the chief sticking point for Doha, and analysts said ahead of the meeting that even yesterday's presidential tete-a-tete may not be enough to resolve deep-seated discord over farm subsidies.

''If (Doha) is going to go anywhere, someone needs to take the first step,'' said Charlotte Hebebrand, president of the International Food and Agriculture Trade Policy Council, a Washington-based advocacy and research group.

US FARM SUBSIDIES A LINCHPIN

For many Europeans, that step should be an American one. EU officials have put the onus largely on the United States in recent weeks, calling for a ''genuine and serious'' offer on reducing US subsidies, which now top 20 billion dollars a year.

Yet subsidy reform is a sensitive proposition for American farmers. Major farm groups like the American Farm Bureau Federation support the Bush administration's existing reform plan, which would cut trade-distorting supports by 53 per cent, but say they won't tolerate more until they see tariffs fall in Europe and key developing countries.

Farm Bureau president Bob Stallman said until that happens, the position of US farmers won't change.

Clinching US farmers' support could be even more difficult because they have grown wary of new trade deals, said Gary Blumenthal, a trade analyst at World Perspectives, a Washington think tank.

With high commodity prices and a growing web of bilateral and regional deals, farmers are increasingly skeptical that a world deal would be much better than what they have now.

Moreover, many US farmers say they are suspicious that even if a global deal is cut, other issues such as food safety rules may keep their goods out of new markets.

Meanwhile some analysts expect a more promising venue for a deal could be the World Economic Forum in Davos, Switzerland, later this month because other major trading nations will be in attendance.

Some advocates of poor countries were unsatisfied with the leaders' words. ''Unless rich countries change their attitudes and put development at the center of the negotiations, we will not get a deal that reduces poverty,'' said Celine Charveriat, a fair trade advocate at development group Oxfam.

REUTERS