Lamy: Failure by US, EU, Brazil, India could doom trade round

By BRADLEY S. KLAPPER, Associated Press Writer
Monday, July 2, 2007 4:21 PM CDT

GENEVA — Failure by the United States, European Union, Brazil and India to eliminate trade barriers to farm produce and manufactured goods could be fatal for the current round of global commerce talks, the World Trade Organization’s top official said Monday.

Washington must lower its agricultural subsidies, the EU needs to ease access to its farm markets, and Brazil and India must offer deeper cuts in industrial tariffs, WTO Director-General Pascal Lamy said.

Divisions on these issues caused talks last month in Germany among the WTO’s four biggest powers to collapse. Failure over the next four weeks to agree on a framework for a deal could make an accord impossible for at least three years, and possibly much longer, trade officials warn.

“What remains to be done is small compared to all the proposals already on the table,” Lamy told a meeting of the U.N. Economic and Social Council. “Reaching agreement on subsidies depends on additional concessions from the U.S. equivalent to less than a week’s worth of trans-Atlantic trade.”

He said the EU and Japan also needed to reduce their highest farm tariffs by only a few more percentage points. Brazil, India and other emerging economies would have to offer similar cuts in their highest industrial tariffs.

The global talks, known as the Doha round, aim to add billions of dollars to the world economy and lift millions of people out of poverty through new trade flows. But they have struggled since their inception in Qatar’s capital six years ago, largely because of wrangling between rich and poor countries over barriers to farm trade and, more recently, industrial trade.

The U.S. and EU last month criticized India and Brazil for refusing to offer new market opportunities for manufacturing exports. The two emerging powers, in turn, blamed the impasse on U.S. reluctance to make cuts in the billions of dollars it pays annually in farm subsidies.

Lamy said the failure by the four to find common ground “was not good news.”

“But it could be fatal if these four members do not play a constructive role in the multilateral negotiations which are now entering into a crucial stage,” he said.

While the four powers do not have a mandate to negotiate on behalf of all of the WTO’s 150 members, their positions cover the range of positions in the Geneva-based commerce body and agreement on some of the outstanding farm trade and manufacturing questions was seen as a key test of whether an overall trade deal could be reached.

The WTO’s top agriculture and manufacturing negotiators are expected to release compromise terms this month, but many doubt the talks in Geneva among the full membership will turn out more successfully than those that involved just the U.S., EU, Brazil and India.

Trade officials say major subsidy tariff concessions are unlikely in 2008, when U.S. elections will be held, and 2009, when Indian elections are scheduled, meaning a breakthrough must be made before August to give the WTO enough time to complete the technical work on a final treaty by the end of the year.

Comments »

Comment on this story

Comments will be approved within 48 hours

Name:

Email: (optional)

Comments:

Image Verification: (Case sensitive)