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US says no clear path to reviving world trade talks

Differences between the United States and leading developing countries India and China that toppled world trade talks last week are too complex to be quickly resolved, a top US trade official said on Wednesday.

“In times like this, it’s often good to let the dust settle, take some time to chill out and then and only then try to figure out a plausible path forward,” Warren Maruyama, general counsel for the US Trade Representative’s office, said in a speech at the American Enterprise Institute. While there has been some speculation about trade ministers meeting again before the end of this year, that would only be productive if the knotty issues that confounded ministers last week could be resolved first, Maruyama said. “There’s really no point in calling people back together and still be at loggerheads,” he said.

US Trade Representative Susan Schwab has talked by phone with other trade ministers since the latest effort to reach a deal in the long-running Doha round of world trade talks failed last week in Geneva. But “the issues that led to the breakdown of the talks aren’t going to get sorted out immediately,” Maruyama said.

The Geneva meeting was seen as the last chance to strike a deal on key agricultural and manufacturing trade issues at the heart of the nearly seven-year-old Doha round before President George W. Bush leaves office in January 2009.


The talks foundered when the United States was unable to reach agreement with India and China on the terms of a “special safeguard mechanism” (SSM) to protect farmers in developing countries from a surge in imports. Bush is on his way to China to attend the Olympics and is expected to urge Chinese leaders to play a stronger role in bringing the Doha round to a successful end. “Geneva was the first time that China participated in the WTO’s inner circle. They were awkward and clumsy at times. It was disappointing that they sided with India on SSM. Hopefully, this was a learning experience and not a sign of the future,” Maruyama said.

The United States accepted a compromise proposed by WTO Director General Pascal Lamy that would have allowed developing countries to hike tariffs on farm goods when imports increased 40% above the previous three-year average. But India and China wanted the safeguard to kick in after a 10 or 15% rise and India insisted developing countries be able to raise tariffs to levels above those allowed under the 1994 Uruguay Round world trade deal.

The United States believes that would jeopardize any farm export gains coming from a Doha round agreement by allowing developing countries to hike tariffs in response to normal growth in trade, rather than an import surge. The issue can not be resolved by splitting the difference between 15 and 40% or through “some legal gibberish” that gives developing countries the right to impose safeguard tariffs whenever subsistence farmers face “demonstrable harm,” Maruyama said, referring to another compromise.

He praised Brazil for breaking ranks with India and working in a small group with the United States, the European Union, Japan and Australia to try to reach a deal. But China apparently saw the safeguard mechanism as an way to roll back market opening commitments it made when it joined the WTO in 2001, he said. (Reuters)