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Portman exit may disrupt Doha Round negotiations

Does the “lateral” transfer of former Congressman Rob Portman from U.S. Trade Representative to director of the Office of Management and Budget signal a new disenchantment with the Doha Round of WTO negotiations?

That was the buzz in Washington after President Bush nominated Portman to replace Josh Bolten, who earlier became White House chief of staff. Susan Schwab, one of Portman's deputies, is getting the nod to succeed Portman.

Some said the nominations, which came just days before an April 30 deadline to reach an agreement on modalities for the new trade agreement, meant the administration was throwing the in the towel on the Doha Round.

Others said the WTO negotiators weren't going to meet the April 30 deadline anyway, so the White House decided it could make better use of Portman's considerable talents by making him budget director.

Portman, who was serving as vice chairman of the House Budget Committee before Bush named him U.S. Trade Representative in 2004, is expected to help repair the administration's relations with Congress and restart the president's plans for budget and tax cuts.

Sen. Charles Grassley, whose Finance Committee will get first crack at any new trade agreement, said Portman's transfer could “hurt the chances of hammering out a successful Doha Round.” But, if no breakthrough occurs in the WTO in the next 30 days, “I don't think it makes much difference who is trade representative.”

Observers of the negotiations, which began in Doha, Qatar, four-and-a-half years ago, have been growing less optimistic because of the European Union's refusal to give any ground on tariff reductions.

Portman proposed a 60 percent reduction in U.S. farm subsidies last November to prod the EU to make cuts in its high tariff rates and get the negotiations back on track for completion by the end of this year. But France, Italy and other EU members have balked.

EU trade commissioner Peter Mandelson said Portman's departure complicates the efforts to move the talks along. “We will, of course, manage without him, but at this stage in the round it would have been easier to manage with him.”

Grassley has said he would kill any WTO agreement that does not include cuts in subsidies and the EU tariffs when it reaches the Finance Committee. Other senators, including Agriculture Committee Saxby Chambliss, have said they would also oppose any “half-way” measures.

While Portman said Schwab is well-qualified to continue the negotiations, others says she is a “technocrat” who has neither the ear of the president or the international respect needed to help push an agreement through the WTO.

Portman was about as smooth as they come whether persuading officials of African governments that the U.S. cotton program was not their problem or explaining complicated WTO jargon to members of the press.

WTO Director-General Pascal Lamy has been talking about another WTO negotiating session meeting in early May. Schwab may get her chance to fill Portman's shoes.

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