WTO unlikely to overcome 'crisis' by month-end

Trading nations are now in a race to another last-ditch deadline 28 days away to overcome weekend failure in Doha Round negotiations to free up trade, but prospects for a deal and ending the “crisis” for the World Trade Organisation (WTO) appear slim.

A crucial meeting at the WTO’s Geneva base simply highlighted the battle lines and set a new deadline, while the United States faced the strongest criticism over its refusal to make further cuts in contested payouts to American farmers.

Warnings from WTO chief Pascal Lamy that the organisation was facing a “moment of truth” in the effort to produce a landmark trade treaty by the end of this year had little impact.

After the failure of the Geneva meeting, Lamy said that negotiators must “face the fact that we are now in a crisis situation”.

European Union Trade Commissioner Peter Mandelson said that it was “five minutes to midnight” at the WTO.

Japanese Agriculture Minister Shoichi Nakagawa warned that the “gap is as wide as the Grand Canyon”.

Doom-laden rhetoric is nothing unusual at the WTO, where the 149 member states have a history of missing targets since they started the Doha Round.

The round has swung from near-collapse to revival and back again since it began in the Qatari capital in 2001 with the goal of slashing barriers to agricultural, services and manufactured-goods trade and harnessing commerce for economic growth in the developing world.

Talks were meant to end in 2004 but the target was pushed back to December 2006, while rich nations were pitted against emerging powerhouses such as Brazil and India, and deep divisions arose between the EU and US.

The WTO members this weekend asked Lamy to pare down the differences.

By the end of July—the “drop-dead date” according to Australian Trade Minister Mark Vaile—Lamy must try to broker a deal on the mathematics for cutting customs duties and rich nations’ farm subsidies.

Such an accord was supposed to have emerged at the end of April, but was delayed until June.

Lamy told reporters he would “crack heads together, consult and confess”.

But the seasoned negotiator cannot force the compromise required under WTO rules.

Sergio Marchi, a former Canadian trade ambassador who chaired the WTO’s ruling General Council, told Agence France-Presse that the “chances for a breakthrough this month are slim”.

If negotiators fail to find a deal before a summer recess in August, they could face more trouble in the autumn as domestic concerns make key players jumpy, he explained.

“These forces are not conducive in providing negotiators with the needed latitude to find a deal,” Marchi told AFP.

President George Bush faces a key test in mid-term elections in the autumn and a rising scepticism among US lawmakers about trade concessions, making it tougher for his administration to climb down at the WTO.

The political calendar for WTO heavyweights also includes presidential elections in Brazil this October and in France in May 2007.

On July 1 2007, the White House is due to lose its special authority from US lawmakers to fast-track trade deals, which could hamper the WTO negotiations if they overrun.

The EU has edged closer to the demands of the G20 bloc of developing countries, which is steered by Brazil and India. The G20 wants rich countries to slash their import duties on farm goods.

That left Washington isolated in Geneva over its refusal to deepen proposed cuts in farm subsidies, which are accused of helping US agri-business undercut its competitors.

US Trade Representative Susan Schwab blamed other WTO members for failing to offer more market opportunities.

Washington and Brussels agree on one thing: emerging nations must lower duties on manufactured goods and liberalise their services sectors. Sapa-AFP


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