Ministers attend symbolic meeting to save Doha

In her opening address to the World Economic Forum, German Chancellor Angela Merkel, who until July 2007 will hold both the EU and the G8 Presidency, said: "The chance for success is without a doubt there," adding that talks should not concentrate on the agricultural sector alone and focus more on the services sector. "We need to find a fair balance," she said. "Everyone needs to be ready to show flexibility." 

Speaking at a conference of the European Policy Centre, WTO Director-General Pascal Lamy said that he did not expect ministers to negotiate on substance, as this would be the first time that they had met since June 2006. But he believes that the "big bosses" have now had time to measure the "modest" cost of success against the "formidable costs of failure" and predicted that they would ensure their "sense of engagement at the top level percolates down" to those conducting the detailed negotiations. 

EU Trade Commissioner Peter Mandelson, who has been voicing the possibility of increasing the average cut in EU farm tariffs from a proposed 39% to more than 50%, is maintaining a positive attitude. "I say that a deal is possible. It is not because I am an inveterate optimist. But there is a window of opportunity," he said. Following a series of bilateral meetings with his counterparts, the commissioner has been claiming that talks have now entered the "endgame", despite US negotiators consistently denying this. 

"Quite frankly, there is no convergence among the key players," said US Trade Representative Susan Schwab earlier this week, adding that an agreement is still "many weeks away". 

Indian Commerce and Industry Minister Kamal Nath has said that the EU and US must sort out their differences before any progress can be made. "I have told the US and EU that they both must converge," he told the Financial Times, adding that developing countries were ready to yield on their positions but that the developed world should be ready to sacrifice more. However, he added that convincing France, which has a presidential election in April, to resist its powerful farm lobby and make further concessions, would be difficult. 

French Foreign Affairs Minister Philippe Douste-Blazy said that the EU's offer to cut agricultural tariffs by an average 39% offer was a "red line" and Trade Minister Christine Lagarde added: "Frankly, I'm not specially optimistic…My gut feeling is that there is much too much to swallow." She concluded: "In the current state of things, if nothing else moves, there is nothing else to offer and no room to manoeuvre." 

Australian Trade Minister Warren Truss cautioned that a failure to restart negotiations after this week's meeting in Davos could unleash a barrage of costly legal challenges to existing trade arrangements. "The lawyers will have a field day," he told Reuters, adding that the key element in reviving the talks would be the US Farm Bill, which will be revised this year. "If they have a bill roughly similar to what's been around in the past, well then no one else is going to respond with significant offers of their own," he said. 

European business groups gathered on 25 January in an attempt to have their voice heard over that of the agricultural lobby, which they stressed represents just 2% of EU GDP and only 1% of US GDP. 

Reinhard Quick, vice-chair of Business Europe’s WTO working group, said that there is "still a real danger of failure", pointing to other failed WTO attempts in Seattle and Cancún. This would be terrible for all areas of the economy, from large scale industry, services businesses and SMEs. 

EuroCommerce Secretary-General Xavier Durieu pointed to the "unique benefits" that a multilateral agreement would offer, including welfare gains, poverty alleviation, better and cheaper products for consumers, more trading predictability, simpler customs procedures and more market access for service providers, which account for 50-60% of economic activity in developing countries and more than 70% in the EU. 

Foreign Trade Association (FTA) Secretary General Jan Eggert said that if no deal is reached at the WTO, "it may not be 'the end of the world' but it would be the end of the multilateral trading system, at least for a few years", adding that he was "frankly not optimistic" but thought that there was "still a fair chance of getting a decent agreement". He explained that a multilateral deal was more important than a bilateral agreement because it would give companies "one picture" rather than a complex "spaghetti bowl" of trade rules. 

"The move to get the Doha Round back on the rails would be welcome, but only if it truly addresses development and is not a stitch-up between the US and the EU," said Oxfam UK Director Barbara Stocking before travelling to Davos for the WEF. "What was being proposed when WTO talks were suspended was far from acceptable," she added. 

Aftab Alam Khan, head of ActionAid’s Trade Justice Campaign, believes that restarting the talks is not a good idea and that the poor will gain nothing from these last-ditch attempts. "Poor countries shouldn't be conned by false offers that will be dangled about in Davos," he said, adding: "Rich nations are trying to rush a bad deal through at the WTO in the next two months which will only push poor countries further into poverty."