Are you sure?

Slim chances for deal on Doha Round

When ministers from a dozen major players in the World Trade Organization (WTO) met for a crucial bid to save the Doha Round talks, expectations for a breakthrough were high but with slim chances.

The first day of the week-long marathon meeting saw repeated scenes of tit for tat between the developing and developed countries, with no one ready to make a real concession to help the talks move on, although everybody agreed a breakthrough now was vital.

In his opening remarks, WTO Director-General Pascal Lamy urged negotiators to make another major step which was within reach in the drive to conclude the Doha Round this year.

“I can think of no stronger spur for our action than the threats which are facing the world economy across several fronts, including rises in food prices and energy prices and financial market turbulences,” Lamy said.

“There is widespread recognition that a balanced outcome of the Doha Round could in these circumstances provide a strong push to stimulate economic growth, providing better prospects for development and ensuring a stable and more predictable trading system,” he added.

The Doha Round of global trade talks was officially launched in2001, designed to slash subsidies, tariffs and other barriers to trade so as to help reduce poverty and spur economic growth in developing countries.

However, the round has missed repeated deadlines in the past seven years mainly due to differences between the developing and developed countries over agriculture and non-agricultural market access.

Lavish farm subsidies in the United States and other developed nations proved to be a sticking point from the very beginning.

India, along with the G-33 alliance of developing countries, accused the rich nations Monday of not making “actual reductions” in the farm subsidies even at a time when high food prices have made the support less relevant.

“Fourteen years after the Uruguay round of talks was concluded, you (the developed countries) are still having subsidies in hundreds of billions of dollars. No actual reduction has taken place,” Indian Commerce Secretary Gopal Pillai said.

“We are looking at a few million rich farmers in the developed countries as compared to hundreds of thousands in the developing countries where agriculture is the issue of livelihoods and food security,” he said, “There is not much room for compromise in these matters because it is a livelihood concern and not for preserving the prosperity of rich farmers.”

In a largely tactical move, the European Union (EU) sweetened its offer by cutting its farm tariffs by 60%, up from 54% that the 27-nation bloc had previously promised.

However, the offer was on condition that emerging economies make reciprocal concessions on market access for industrial goods, which was dismissed by a Brazilian negotiator as mere “propaganda.”

US Trade Representative Susan Schwab piled similar pressure on developing countries, especially emerging economies such as India, Brazil and China, warning them to open up markets if the seven-year Doha Round were to succeed.

At the end of Monday's talks, Brazilian Foreign Minister Celso Amorim described the first day of meetings as “totally useless” owing to the absence of new ideas.

“Maybe it was a necessary meeting, maybe we have to go through that but it was actually totally useless from my point of view, because I did not hear any new ideas, any new suggestions, let's wait for tomorrow,” he told reporters.

Besides quarrels which were nothing new, internal struggle within the EU and India, two leading members in the negotiations, posed additional risks to a successful wrap-up this week.

EU Trade Commissioner Peter Mandelson, who led the EU negotiation here, was under immediate pressure from some member states, notably France, which holds the EU rotating presidency.

With French Agriculture Minister Michel Barnier also present in Geneva, Paris was keen to keep a close eye on Mandelson, who was accused by French President Nicolas Sarkozy of offering too much in cutting EU farm subsidies before receiving reciprocal concessions from rapidly developing countries.

As Europe's biggest agriculture power as well as the largest beneficiary of EU farm subsidies, which amount to billions of euros every year, France has been reluctant to see the EU reduce generous handouts to its farmers due to global trade deal.

Analysts said France's reluctance was set to limit the flexibility of Mandelson in the negotiations.

Meanwhile, the first day of meetings was held in the absence of Indian Commerce Minister Kamal Nath, who was back home for a crucial vote of confidence in parliament Tuesday.

The vote would decide the fate of the coalition government of Indian Prime Minister Manmohan Singh after a controversial civilian nuclear deal with the United States.

Diplomats in Geneva warned that a collapse of the Indian government could send negotiators back home earlier with empty hands since without India, there would be little prospect for a deal. (Xinhua)