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Global slowdown may raise hopes for WTO

A global economic slowdown may improve chances for an international trade accord as governments seek to combat protectionism, said Pascal Lamy, director-general of the World Trade Organization.

Lamy, in New York this week for meetings with officials and business groups, demanded that the US agree to cuts in its farm subsidies and that the European Union, India and Japan offer deeper cuts in their farm tariffs to restart talks that broke down last July. „The prospect for a less buoyant world economy would help concentrate minds on the risks of protectionism,” Lamy said in an interview from New York. Even with low unemployment in the US, „you can see protectionism just below the surface,” he said. The countries should try to restart the WTO talks by early next year so that there is the possibility that the US Congress will agree to extend negotiating authority for the Bush administration beyond a mid-2007 expiration, he added. Without a trade accord next year, offers already made to cut spending on farm subsidies, reduce red-tape needed for goods to clear customs at borders and reduce tariffs on industrial products can't be made good. The World Bank has estimated than an accord would be worth at least €75.4 billion ($96 billion) a year to international commerce. „The world economy needs it,” Lamy said. At this point negotiators are having „discreet and secret” discussions to try to bridge their differences, he added. (Bloomberg)