Sunday, January 29, 2006

Ministers more upbeat over stalled trade talks

DAVOS, Switzerland - Trade ministers from around the world said on Saturday they were more optimistic they could overcome their differences that are blocking attempts to strike a new global trade deal.

Meeting in the Swiss mountain resort of Davos, they said there was a new sense that progress had to be made on all outstanding issues, rather than focus on the thorny subject of agriculture that has put the European Union under pressure.

"Today it is fair to say that there was consensus for the first time that all pieces of the puzzle need to come together at once," said U.S. Trade Representative Rob Portman.

EU trade chief Peter Mandelson, who has insisted that countries like Brazil must come up with cuts to their tariffs on industrial goods to unblock the process, was also upbeat.

"I did feel encouraged by what I heard around the table," he said, adding the demands for the EU to offer more on farm goods "are falling on stony ground amongst WTO members as a whole."

Mandelson warned earlier this week that the EU had nothing to lose if the talks collapsed now.

Ministers from about 30 member countries of the World Trade Organization (WTO) did little hard bargaining in Davos, where they met on the sidelines of the World Economic Forum.

Instead they focused on schedules for more talks over a new WTO round that could boost the global economy and ease poverty.

They stuck to an April 30 deadline for agreement on lowering barriers to commerce in farm and industrial goods.

"I am slightly more optimistic after Davos than I was before Davos," said Brazilian Foreign Minister Celso Amorim. "As long as we are negotiating everything is possible."


He renewed a call for a meeting of political leaders from key trading countries and said it should take place in late February or early March to push the negotiations forward.

Britain's finance minister Gordon Brown has backed the idea of such a meeting.

The EU, the United States and Brazil have swapped blame for the deadlock. The WTO's 149 member states failed to agree on the most sensitive issues when they met in Hong Kong in December and they set the April deadline instead.

The EU has been pressed to go further with its planned cuts to farm import tariffs by Brazil and rich exporters like the United States and Australia.

Brussels, however, has been equally adamant that the time has come for Brazil, India and other leading developing countries to say what they are prepared to offer in areas of interest to the Europeans, such as industrial goods.

India and Brazil say they could cut industrial tariffs 50 percent from what they are allowed to levy. But the EU counters that this would not give more market access.

The EU on Saturday won backing from Egypt, which represents African nations. It said the time had come for Brazil to drop its insistence on agriculture moves before other progress.

"Enough is enough. Let's put things on the table and really start to negotiate," Trade Minister Rachid Mohamed Rachid said.

Mandelson also said he would fight any attempt to block the opening of markets in services, another key area of interest for European companies in areas such as banking and energy.

In Hong Kong, WTO ministers called for fresh offers of liberalization in services by the end of February with the bulk of the negotiation to finish in July. Mandelson proposed a "midway review" on progress in services.

Ministers plan to meet again in March. The final deadline for a deal is mid-2007 when U.S. President George W. Bush loses his power to negotiate independently of Congress. To be ready by then, all the details must be wrapped up in 2006.

They hope to overcome their differences to strike a new global deal. Looks like our world is entrusted into the hands of money grabbing governments who do not care if such deals make a difference to the people.

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