Hopes high for ‘last chance’ world trade talks

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Only a few question marks remain in stuttering, six-year long negotiations on freeing up global trade, top EU and US trade officials said ahead of another “crunch” WTO ministerial meeting on Monday (21 July).

Time is now “ripe” for ministerial decisions, EU Agriculture Commissioner Mariann Fischer-Boel told journalists on 17 July, although she added that there is still “much work to do”. 

She was echoed by the US Trade Representative Susan Schwab, who announced that the US would be heading to Geneva on 21 July for talks with trade ministers from key nations “with the clear intention that there’s a deal to be had”. 

Key technical advances 

In agricultural discussions, touchy issues such as the size of tariff cuts that countries will have to deliver and how governments will be allowed to protect some of their more sensitive sectors – such as sugar or beef in the EU – are nearing resolution. 

In industrial negotiations, wide divergences still remain – mainly between the EU and the US on the one hand and countries like China and India on the other – as to the formula that will determine countries’ future tariff levels and the extent of flexibilities for developing countries. But the EU appears to have succeeded in including an ‘anti-concentration’ clause that would prevent developing countries like China from sheltering entire sectors of their economy. 

Time is pressing

“If we cannot establish modalities now, I believe that the negotiations will be put into the freezer for I don’t know how long,” warned Fischer-Boel. Indeed, if a deal is not reached by this summer, it is thought there will be no choice but to suspend the process until the new US administration takes office in January 2009, or even until the new European Commission begins its mandate in November 2009.

Trade Commissioner Peter Mandelson also warned that a breakdown at the Geneva talks would signal the world’s inability to tackle new global challenges such as climate change, energy security, the global food crisis and the current credit crunch (EURACTIV 15/07/08). 

European businesses are desperate for a deal, which they say will bring commercial benefits to business and global economies. According to BusinessEurope, “now is the crucial moment in determining the fate of the Doha Round. During a time of international economic uncertainty, successful conclusion of the Doha Round will […] provide a much-needed confidence boost to the global economy and its stakeholders: large and small businesses and employees and workers as well as consumers”. 

But NGOs, represented by the Seattle to Brussels (S2B) Network – a pan-European network of more than 70 organisations from 16 countries – say the trade agenda being pushed by the EU in the WTO talks is “doomed to fail”. 

‘Banana threat’ 

Mandelson also warned that an accord could be scuppered due to a long-standing dispute among banana-producing countries on imports to Europe. 

African, Caribbean and Pacific countries have been fighting EU tariff cuts on banana imports in a bid to preserve their preferential access to the EU market, but Latin American nations argue that this contravenes international trade rules. According to Mandelson, the issue, which has already been the subject of eleven successive WTO rulings, could affect a broader deal on the treatment of tropical goods and the question of erosion of preferences that are crucial to the conclusion of an overall global trade pact. 

He therefore urged all countries to agree to the compromise deal put forward by WTO head Pascal Lamy, even if it is not ideal. “The EU will not block it,” he said, adding that if others chose to do so, they must assume responsibility for the failure of the whole Doha Round. 

But according to Panama’s Chief Trade Negotiator Leroy Sheffer, while Latin American countries are “willing to be reasonable in the interest of settling this long dispute,” they will need to see “a better starting reduction, phase-in period and final rate” than currently provided for in the Lamy initiative. “For the past 14 years, the EU’s banana regime has discriminated against Latin American producing countries,” they stress. 

Internal disputes 

While the EU still has to bridge gaps with its major trading partners, the heart of the discord in recent weeks has been between Commissioner Mandelson and French President Nicolas Sarkozy. 

A staunch defender of current EU subsidies and tariff protection measures for farmers, Sarkozy took over the EU’s rotating presidency on 1 July and is seeking to ensure that Mandelson does not overstep the negotiating mandate set out by EU member states. 

Following an extraordinary meeting of EU trade ministers on 18 July, French State Secretary for Trade Anne-Marie Idrac warned the Commission: “The general feeling is that the Union has exhausted its room for manoeuvre on agriculture and cannot go any further […] So we won’t be making any further concessions.” She further added that she would be keeping a close eye on Mandelson’s behaviour at the Geneva meeting. 

But Mandelson has stressed: “We have one mandate. We have been operating within it and will continue to do so. We have one set of negotiating directives from the member states. I do not envisage those changing.” He played down the tensions between himself and Sarkozy, saying: “Of course there are different priorities and emphases among the member states, but when you arrive at a common trade policy, as we have, you do so in the knowledge that whatever the tensions, there is at the end of the day unity among the member states for the position that we have the responsibility for arguing and negotiating in Geneva.” 

For its part, the S2B Network insists both sides are in the wrong: “The EU, through the voice of its European Commissioner Peter Mandelson, is still making unfair and unsustainable requests to emerging and developing countries. On the other hand, beyond all the talk of ‘Europe that protects’ propagated by the current president of the Council, Mr Sarkozy, the EU is still moving forward with an unsustainable agricultural system, which mainly serves the interests of the European agribusiness industry, without consideration for the livelihoods and the food sovereignty of European or Southern small-scale farmers,” it laments. 

The Doha Development Round, which aims to liberalise global trade and extend the benefits of globalisation to developing countries, was launched by ministers of WTO member countries in November 2001 in the Qatari capital, Doha. 

Talks have been continuing on and off for the past six and a half years but governments have thus far failed to achieve any kind of convergence on the reduction of farm subsidies and cutting tariffs on industrial and agricultural products. 

WTO chief Pascal Lamy convened a new ministerial meeting for 21 July to discuss the latest negotiating drafts. 

  • 21 July 2008: Mini WTO ministerial meeting in Geneva.

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