WTO Meets to Revive Doha Round Trade Talks
July 23, 2006
Top officials including US Trade Representative Susan Schwab, EU Trade Commissioner Peter Mandelson and counterparts from Australia, Brazil, India and Japan face a stiff challenge: do something to save the talks, which are teetering on the brink after almost five years of jousting.
Much of the logjam in the negotiations at the 149-nation WTO hinges on disagreements amongst the heavyweights, particularly in the vexed area of the farm trade.
The key players are at loggerheads over the relative concessions required, constantly urging one another to make a move.
That is hardly a recipe for success, said a senior US trade official.
"I think what we're all looking for now is to get beyond the rock, paper, scissors dynamic," said the official, speaking on condition of anonymity.
The talks have "so many moving parts" that everyone needs to shift at the same time to keep the machine moving forward, said the official.
The Geneva gathering, behind closed doors at the US mission in Geneva, is scheduled to continue Monday and be followed by further talks on July 28-29.
It comes in the wake of the Group of Eight (G8) summit of leading powers in Saint Petersburg, Russia.
Hopes for conclusion by year-end
The G8, which comprises Britain, Canada, France, Germany, Italy, Japan, the United States, and Russia which is not a WTO member, on July 16 had said that negotiators must within weeks thrash out the broad outlines of a deal and help steer the Doha Round to its conclusion by the end of the year.
The following day, G8 leaders joined forces with counterparts from Brazil, China, India, Mexico and South Africa to try to spur the Doha Round on.
The negotiations began in capital of Qatar in 2001 with the aim of producing an international treaty that would tear down trade barriers such as subsidies and customs duties and enable trade to improve living standards in developing countries.
The round was meant to end in 2004. That target was later shifted to December 2006 because of persistent breakdowns.
The talks have swung back and forth from collapse to revival, leaving behind a string of missed deadlines.
Rumors of a deal
A so-called crunch session at the beginning of this month fizzled out without a breakthrough. But rumors have been flying since the G8 summit that, behind closed doors, the leaders cut a deal to end the Doha deadlock.
It has been suggested that US President George W. Bush offered deeper cuts in Washington's farm subsidies, which according to critics skew trade in favor of agribusiness in the United States.
In October, in what it billed as a bold move to jumpstart the Doha Round, Washington offered to slash its payouts by 53 percent.
Other WTO members were and are still unhappy, saying the proposal lacks bite and would leave the US room to spend around $22 billion -- more than current payouts.
There have been claims that during the G8, Bush offered to set a ceiling of $15 billion. But several trade diplomats have dismissed the suggestion that the G8 leaders talked figures, with one saying it is based on "very wishful thinking."
Deeper cuts would be a tough sell domestically for the US leader ahead of crucial mid-term elections in November.
Developing countries, meanwhile, also want the EU to reduce its customs duties on imports of agricultural goods.
EU ready to bargain over tariffs
At the WTO talks last month, EU trade commissioner Peter Mandelson said that if others made the right moves, the EU was prepared to step "towards and close to" the 54-percent tariff cut demanded by Brazil and India, which steer the powerful G20 lobby of developing countries.
The current EU proposal is 39 percent, although EU officials have said Brussels could accept 51 percent. "If we are going to move towards the G20 figures on tariffs -- and we're prepared to do that -- the US is going to have to do the same on subsidies," said an EU diplomat.
Washington and Brussels agree on one thing: they want more concessions from the developing world on trade in services and manufactured goods.
The specific target for the upcoming WTO meetings is a deal on "modalities" -- WTO jargon for the mathematics for cutting subsidies and customs duties -- a key step towards a final treaty.