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Negotiators have just a few days to reconcile their differences on a host of trade issues, says WTO chief

GENEVA, Switzerland – 07/27/08 – The Doha Round of world trade talks has been extended until this Wednesday in an effort to save the negotiations from total collapse.

The move comes as some European countries expressing concerns over proposed concessions they believe will harm their politically-influential agricultural sectors.

Trade ministers from 36 World Trade Organization (WTO) members countries are currently meeting in the Swiss capital in what some are calling a last-ditch effort to conclude a comprehensive trade deal aimed at boosting the world economy.

"If we do not see this rapid progress toward convergence, I am afraid that the deal that you came here for this week will not happen with all the intended consequences," said WTO head Pascal Lamy, who is mediating the negotiations.

"This is the bloody reality. The situation as I see it is critical, edging between success and failure,” said Lamy, who met with reporters last Friday evening after four days of negotiations ended with no progress to speak of.

The negotiators, he said, “need to change gears very quickly to turn things around.”

Over the past seven years, the Doha Round of trade negotiations have lurched from one crisis to another over a variety of sore issues including market access, transparency and agricultural subsidies and many analysts feel that the round will die if a deal does not emerge in the next few days.

The  Doha Round was officially launched in 2001 and was intended to slash subsidies, tariffs and other barriers to trade so as to help reduce poverty and spur economic growth in developing countries.

Several European countries – notably Italy, France and Ireland – have been highly critical of recent concessions made by European Union chief and senior Doha negotiator Peter Mandelson on farm subsidies. They think the cuts are too deep and will harm their respective agricultural industries.

“There is nothing that we are negotiating in this deal that would undermine any part of European agriculture,” Mandleson said, adding that the beef industry, “like others in European farming, have a strong future. I believe that as a result of this round, they will be equipped and strong to compete effectively in our European market and I believe that they can look forward to that strong future."

The agreements being discussed would lead to more open markets and trade liberalization, and this will benefit both developed and developing countries, he said.

The proposed settlement calls for cutting European farm subsidies by 80% and cutting US agricultural supports by 70% to $14.5 billion. The compromise proposal also calls for cuts in tariffs on agricultural imports and on industrial goods. 

A number of countries, including the US, Brazil, Australia and India say they welcome some of the agreements on the table and are “hopeful” a deal that is good for the global economy is possible.

But WTO spokesman Keith Rockwell says if a deal does not emerge, the ministers might take a break from the negotiations.

"To say that members would be prepared to abandon the sort of work that they have put in here, which is intensive, certainly over the course of the last 12 months. It is not in the nature of negotiators to walk away from the kinds of things that they will have constructed. So, I do not know what would happen," said Rockwell.

But, he added, “I would not say that all is lost under any circumstances by the end of this week regardless of what happens."

The trade ministers have a lot of work to do during the next few days.They will have to look at the prospects of liberalizing services such as banking and telecommunications. The outcome of those negotiations will have a bearing on the outcome of the farming and industry talks.

By Wednesday, economists say it will be clear whether governments are willing to make the necessary trade offs to agree on a deal that they have forecasted could boost the world economy by $50 billion a year.

According to a proposal by Lamy, members should reach agreement first; and then their agreement would be sent for approval by the full WTO membership. Any member has the power to veto a deal.

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