WTO talks deeper in crisis, no breakthrough

Original Publication Date: 
23 July, 2006

GENEVA (Reuters) - Hopes were fading on Tuesday of keeping alive a global free trade deal after trading powers failed to make a breakthrough at a marathon first session, diplomats said.

The so-called G6 -- Australia, Brazil, India, Japan, the European Union and the United States -- must reach agreement on how to boost trade in farm and industrial goods or risk seeing nearly five years of WTO negotiations crumble in failure.

But 14 hours of negotiations on Sunday, chaired by World Trade Organisation (WTO) chief Pascal Lamy, who has the task of brokering a deal, failed to make progress in the key area of farm subsidies, known as domestic support, where the United States is under pressure to make further concessions.

"There was no movement at all on domestic support. We will meet again tomorrow (Monday) to see if things have changed overnight, whether new ideas have popped up," European Union Agriculture Commission Mariann Fischer Boel told Reuters.

"There was no progress, we are getting more and more pessimistic," said a diplomat from another WTO state that took part in Sunday's talks behind the high walls and barbed-wire fences of the U.S. mission in Geneva.

The United States had no immediate comment. Washington has been insisting that the EU and other WTO members that it calls "protectionist" go further in agreeing to lowering farm tariff barriers before it moves further on subsidies.

Trade ministers were due to gather again at 0900 GMT on Monday at the lakeside offices of the WTO in what could be a final attempt to salvage a deal.

WITHOUT ENOUGH TIME

"It is looking pretty bleak," said another trade source who has been following the talks closely.

Diplomats say another failure by the six, who have already made several "last ditch" bids for a deal, would leave the 149-state WTO without enough time to complete all the complex details of a global free trade treaty by the end of the year.

The end-year deadline for concluding the Doha round, which was launched in the Qatari capital amidst much fanfare in late 2001, is dictated by the 2007 expiry of special U.S. presidential powers to negotiate on trade.

The round has been billed as a once-in-a-generation chance to boost global growth and lift millions out of poverty.

Lamy has set a further two days of talks for July 28 and 29, but diplomats said that without some progress now there would be little point in a further meeting.

After promising their negotiators would be more flexible, the Group of Eight leading industrial powers last week set a fresh mid-August target for a breakthrough in the key area of agriculture and manufactured goods.

The G6 has played a leading role because together they account for some three quarters of world trade and represent a wide range of commercial interests.

Lamy says that the United States must offer deeper cuts in its farm subsidies, the European Union must further drop barriers to farm goods' imports and the big developing countries must agree to open up their markets for industrial goods.

Washington says its offer to reduce subsidy limits by 60 percent is significant but trade rivals argue the cuts leave real spending unaffected.

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