Int’l efforts to revive Doha talks

London, January 1:

A flurry of diplomatic activity from Washington to New Delhi and on to the alpine ski resort of Davos will mark the first month of the new year as one final attempt is made to provide a kiss of life to the failing Doha trade talks.

Amid concern that only three months are left to save the package of liberalisation measures, pressure will be put on the main protagonists — the US, the EU and India — to settle their differences.

Sources in London said Britain has not given up hopes of a deal, despite the breakdown in the World Trade Organisation (WTO) talks last July. Tony Blair has been urging George Bush, Angela Merkel, the German chancellor, and president Lula of Brazil to give a political push to the negotiations, and two senior cabinet ministers — the chancellor (finance minister), Gordon Brown, and the trade and industry secretary, Alistair Darling — will visit India later this month.

Trade ministers from around 20 countries will then hold talks at the annual meeting of the World Economic Forum (WEF) in Davos in late July, although trade experts believe a more significant event will be the swearing in next month of the new Democrat-dominated Congress in the US.

The WTO’s director-general, Pascal Lamy, has called 2007 a ‘defining year’ and in Geneva it is recognised that the next few months will be crucial both for the Doha round and for the credibility of the WTO. No trade round has failed since the protectionist decade of the 1930s.

With 2008 seen as a write-off because of the US presidential election, the WTO says that

if there is no deal in 2007 it will be mid-2009 before negotiations can resume.

The talks involve plans for freer trade in agriculture, tariff cuts in manufacturing and the opening up of global trade in services.

President Bush now has a number of important decisions to make, Lamy believes. Firstly, he has to decide whether he is serious about a global deal or not; if so he has to make bigger cuts in subsidies to US farmers than currently offered.

Secondly, he has to face down demands for a new farm bill when the current package of support runs out this year. WTO sources said a new farm bill would spell the end of the Doha round.

Finally, Bush has to avoid partisan warfare in Washington between a Republican White House and a Democratic Congress. Bush will lose the ability to fast-track a trade bill through Congress under his Trade Promotion Authority unless legislation is tabled by the end of March.

That, however, would require negotiators to show a degree of urgency lacking since the talks were started in the Qatari capital in November 2001.

Peter Mandelson, Europe’s trade commissioner, believes that the way to unblock the round would be for the US to put a ceiling of $15 billion on subsidies, compared to current spending of $19 billion. An EU trade source said, “Doha is not dead: definitely. There is a very narrow window to pull it off, and the politics are difficult. But some of the political stars are coming into alignment.”