Mandelson rejects compromise on Doha

A deal proposed by Australian Trade Minister Mark Vaile to revive global trade talks before the end of the year has been rejected outright by the European Trade Commissioner.

The proposed compromise was to be presented by Vaile on the eve of a 20th anniversary meeting of the 18 nation-Cairns Group of agricultural exporters on 20-22 September 2006. 

The deal would have seen an additional reduction of 5% in average agricultural tariffs for the EU and an extra cut of around $5 billion on domestic support for the US. 

However, in an interview with the Australian Financial Review, Peter Mandelson, rejected the deal as “undo-able”, saying it asked too much of European farmers and placed a heavier burden on the EU than on the US. 

Mandelson also claimed that the deal would be rejected by developing nations, who would also have to reduce their tariffs by 5%. “I think Australia understands that this would be unacceptable to developing nations,” he said. 

“We think that’s a middle ground position, but one that neither party is willing to move to at this stage,” said Vaile, who said it was natural that the EU and US were taking a hard line to defend their positions but warned against time running out: “What’s at stake is whether or not we can get this round moving again and a negotiated outcome that can be concluded by early next year.”

However, in a further sign that hopes of a successful global trade agreement are dimming, Mandelson, in a speech on 18 September, reiterated his intention to “re-model” the EU’s trade policy “by setting out the case for new free trade agreements … particularly in Asia”.

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