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Latest WTO talks end with no progress reported

When a sports team is having a bad practice or just not accomplishing much, the coach sometimes will pull the players off the floor and send them to the locker room. That’s basically what happened in the latest attempt to resuscitate the Doha Round.

“They had a lot of people, standing around, talking,” said a commodity organization staffer, referring to the meeting of representatives from 50 countries that took place at the WTO headquarters in Geneva the July 1 weekend. “But, mostly, they were just re-stating their positions. That’s probably why they called the talks off a day early.”

U.S. trade representatives were trying to put a good face on the apparent lack of any significant progress at the meeting attended by representatives of the world’s largest economies and the leading developing countries such as India and Brazil.

“We remain fully committed to an ambitious, robust round that opens new markets for the world’s farmers, manufacturers and service providers,” said Susan Schwab, the new U.S. trade representative. “This is the only way to deliver on the Doha promise as a development round. We have no intention of giving up hope.”

But WTO Director-General Pascal Lamy told reporters in Japan that the negotiators are now “in a dangerous situation” regarding efforts to break the current impasse over income support and market access or tariff reductions.

“If WTO members are serious about creating a more open, equitable trading system, I believe there is no option but to move now,” said Lamy, following a meeting with Japanese Prime Minister Junichiro Koizumi and members of his cabinet in Tokyo. “The time for delay is over.”

Lamy continued to call for the United States and the other members of the G-6 – Australia, Brazil, the European Union, India and Japan – to make concessions to help end the impasse. “The key mending zone for these talks lies in real cuts in subsidies and increases in trade flow,” he was quoted as saying. “We cannot reach an agreement that falls short of these.”

Ambassador Schwab and Agriculture Secretary Mike Johanns also sounded that theme, saying the United States “took a risk that’s associated with leadership” last October by tabling a proposal that would reduce income support to U.S. farmers by 60 percent and reduce tariffs by up to 66 percent.

“We expected that it would be matched by similar bold moves by others,” said Schwab, speaking to reporters at a briefing near the end of the talks in Geneva. “Regrettably, that hasn’t happened yet.”

The United States has made similar proposals for improved market access in the manufacturing sector with little response from other WTO members, said Schwab, who replaced former Ambassador Rob Portman as the chief U.S. trade negotiator in June.

For agriculture, Schwab sees two principal shortcomings: “First of all the tariff cutting formulas that are currently on the table do not really deliver the kinds of cuts that are required to expand trade flows. Second, possible gains from tariff formulas are undermined by loopholes proposed by both developed and developing countries.

“These are the three S’s – sensitive products, special products and special safeguards.”

Currently, the European Union is proposing tariff reductions of 39 percent; the G-20, a group of developing countries led by Brazil and India, 54 percent; and the United States, 66 percent.

Some observers say they believe the WTO negotiators might finally settle on the G-20 figure of 54 percent, but U.S. commodity group analysts say U.S. agriculture needs the reduction to be between 60 percent and 75 percent to offset the loss in income support from lowering the amber box ceiling by 60 percent.

Johanns said the tabling of the U.S. proposal last October “truly did jump-start the round. All of a sudden the buzz was that we had a round and that we were off and going. But that was based upon the notion that we had to achieve market access as a condition to that proposal.

“Market access is not only important to the United States but to the rest of the world. As has been said so many times, you can review about any study and the conclusion reached is that the opportunity for real advancement will come out of the market access pillar.”

But the debates at the beginning of the July 1 weekend meeting demonstrated how far about the negotiators remain on the market access provision, he said.

“Under the proposal by the G-33 (another of the designations for the numerous groups of countries that continue to emerge within the WTO), 94 percent to 98 percent of the developing countries’ markets would be blocked to our producers,” he said.

“I don’t know of anybody that could make a case for that to be a fair result when it comes to market access.”

Add to that the potential for sensitive product designation by developed countries and to that the special safeguard mechanisms available to them and you have reason for concern about any opening of market access, Johanns said.

“In fact, in some of the discussion of an analysis of the G-20 proposal, which has gotten some additional discussion because of the EU’s interest in that, you add in these factors and your market access drops to about 40 percent. That would be concerning to anyone.”

Ambassador Schwab said the negotiators must “shift the debate from how to grow loopholes in both agriculture and manufactured goods that undermine liberalization and focus instead on what each of us – developed and developing countries alike – can bring to the table to ensure the Round succeeds.”

She said U.S. negotiators are “ready to roll up our sleeves and work to find the breakthrough that will enable the successful conclusion of the Doha Round. It is the right thing to do for the U.S. economy, global development, and strengthening of the world trading system.”

Following the end of the talks, Senate Agriculture Committee Chairman Saxby Chambliss issued a press release, saying he also believes the Doha round can still be successful.

“While the negotiations broke off without any progress, I remain hopeful and optimistic that the talks can continue towards a successful conclusion,” he said. “Ambassador Schwab and Secretary Johanns deserve praise for continuing to push for a meaningful agreement in spite of significant pressure.

“Member countries must be ambitious and commit themselves to liberalizing trade. That means new trade flows and export opportunities for America’s farmers and ranchers. The United States will not unilaterally disarm and reductions to domestic support remain conditional on the amount of market access achieved in the negotiations.”

Chambliss, a Republican from Georgia, said the United States will continue to do everything it can to achieve an agreement, “the EU and the G-20 must come forward with meaningful offers rather than political posturing.”

Representatives of the 50 nations attending the July 1 meetings did agree to ask Lamy to continue to act as a broker to try to find some common ground for a breakthrough in the impasse over farm subsidies and market access.


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