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Lamy outlines a new plan to get the stalled negotiations back on track

GENEVA - 05/06/06 - Frustrated, but putting as positive a spin as possible on the situation, World Trade Organization (WTO) Director General Pascal Lamy has said that negotiators must reach agreement by mid-June on broad parameters for reductions in tariffs on agricultural products and cuts in trade-destabilizing farm subsidies.
 
That is "absolutely critical," he said, because a final deal needs to be struck in time for President George Bush to submit it to Congress under the five-year Trade Promotion Authority (TPA) powers he received in 2002 to negotiate trade agreements.

Admonishing the WTO's 149 member nations about meeting that schedule, Lamy said, "It may be that waiting is the definite killer of the round."

Extension of the president's TPA, sources have said, is expected to face a sharp fight on Capital Hill.

The proposed tariffs reductions and subsidy cuts are at the heart of the ongoing Doha Round negotiations, which were launched in 2001 with the goal of spreading the benefits of global trade to developing nations.

If a successful pact on agricultural issues is reached, negotiators will turn their attention to forging another accord in July on reducing barriers to services, and, then, craft a final comprehensive agreement by the end of the year, said Lamy, who served as European Union Trade Commissioner before assuming his new post last fall.

Discouragement about prospects for a global trade agreement has reportedly deepened by the day, fueled by a major negotiating deadline missed for the third time last weekend and the recent news that US Trade Representative Rob Portman will move on to other duties in the White House within the next few weeks.

But the head of the World Trade Organization, far from giving up, is laying out new plans for completing a deal this year, while warning that it is probably the last good chance for a long time.

Negotiators have been deadlocked for months, with many countries blaming the European Union's resistance to further opening its markets to foreign-produced agricultural goods.

Recent developments have intensified fears among free-trade advocates that the Round is in danger of indefinite delay or collapse, which could deal a serious blow to the WTO's status as the overseer of the 60-year-old multilateral global trading system.

With tongue only partly in cheek, he warned that trade ministers would not be able to reach a deal during the final stages of the wildly popular World Cup soccer championships, which run from June 9 to July 9.

"The general conclusion in Geneva is, maybe they could negotiate during the round of 16, maybe during the round of eight, but you know the semifinals become a real red zone; there's no way that ministers will be able to negotiate valuably in that zone," he said.

More seriously, Lamy said, the mid-June deadline should be taken to heart because so much time is required for haggling over final numbers, services and other issues during the year's remaining months.

The WTO head rejected suggestions that the round's completion be put off this year because of elections looming in major countries, including the US and France, which make it difficult for negotiators to offer concessions.

The most recent such assertion came from Christine Lagarde, France's trade minister, who said in an interview published recently in the Paris-based International Herald Tribune that negotiators should "think it through a bit harder and a bit longer rather than jump in a direction that was planned in 2001."

Although more time is obviously needed, Lamy said, "it's a question of days and weeks, not months and years." He cited the long lead times routinely needed to submit a finalized deal to Congress before the expiration of Bush's negotiating authority in June 2007.

USTR Portman and his deputy and designated successor, Susan Schwab, were in Geneva this week in an attempt to revive the stalled trade negotiations.

"We will be in Geneva to talk honestly about our differences and attempt to bridge those differences," said Portman before leaving for Europe.

Asked whether Washington might modify some of its positions, in particular its proposal to slash farm subsidies and tariffs, he said, "Our proposal is not a take-it-or-leave-it approach."

EU Trade Commissioner Peter Mandelson seized on Portman's comment as "an important advance," even though US trade officials have said it was a long-standing US position.

The EU "will be prepared to further enhance our current agricultural offer," Mandelson said, but only if big developing countries such as Brazil and India agree to open their markets to manufactured goods.

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