Talks to weigh future of WTO free trade pact

Geneva, June 22: Negotiators today were set to plan their next steps at the World Trade Organisation after key talks between four leading powers collapsed, casting doubt on whether a long-sought free trade pact can be clinched.

US Trade Representative Susan Schwab, Indian Commerce Minister Kamal Nath and Brazilian Foreign Minister Celso Amorim all packed up for Geneva after their meeting in Germany failed to overcome divisions over how far to open their agricultural and industrial markets and cut farm subsidies.

Success in the Potsdam talks, which also included European Union Trade Commissioner Peter Mandelson, was seen as critical to salvaging the WTO's so-called Doha round after nearly six years of negotiating. Mandelson said he planned to meet EU members states on Monday to discuss next steps.

Following the breakdown, which developing- and rich-country representatives blamed on each other's weak negotiating stances, WTO Director-General Pascal Lamy summoned the Doha steering group for a Friday afternoon Trade Negotiating Committee meeting meant to stress that the search for an accord will continue.

''Convergence among these members would have been helpful to pave the way towards multilateral convergence. But helpful does not mean indispensable,'' Lamy said in a statement.

''I now call on the members of the G4 (Group of Four) to contribute to the multilateral negotiating process, which will continue as of today in Geneva.'' Launched in the Qatari capital in late 2001, the WTO's latest intended free trade pact was meant to steady the global economy after the Sept. 11 attacks on the United States and address inequities making it difficult for poor country goods to compete on the global market.

Problems from the start

But it faced problems from the start, mainly over the issue of agriculture, which is highly sensitive almost everywhere.

Washington and Brussels have demanded that any deal that significantly cuts agricultural protections must open new export markets around the world in farming, manufacturing and services.

Developing economies are looking for new opportunities to export their own farm and manufacturing goods. They argue rich countries should not expect big new market access in exchange for cutting their trade-distorting farm subsidies and tariffs.

While trade officials warned it would be hard for the full 150-member WTO to meet an end-July target for a Doha deal without a preparatory agreement in Potsdam, ministers insisted the multilateral process was not yet dead.

Time is running short, however. Lamy has said that without a breakthrough by August, the negotiations could be put on hold for several more years or even fail altogether, leading to a rise in protectionist measures and trade disputes.

A Brazilian diplomatic source said Brazilian President Luiz Inacio Lula da Silva would talk by telephone to German Chancellor Angela Merkel and British Prime Minister Tony Blair on the crisis in the talks. Lula would speak to Merkel last night and with Blair today, the source told Reuters.

Reuters

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