The United States wants to pick up the pieces from failed global trade talks with a “common sense” approach and a nod to some developing nation concerns, the Bush administration’s top trade official said yesterday.
Rich and poor countries fought to a stalemate during World Trade Organization talks in Cancun, Mexico, in September, all but ruining hope for new global rules governing trade in farm goods, manufactured goods and services by a year-end deadline.
A “good” agreement, with lower tariffs and reduced agriculture subsidies, would boost world economies by $520 billion and lift some 144 million out of poverty in the next 12 years, according to the World Bank.
U.S. Trade Representative Robert B. Zoellick, in a letter sent to WTO ministers, called on countries to advance negotiations this year by focusing on the basics of a new agreement, especially agriculture, goods and services.
“I do not want 2004 to be a lost year for the WTO negotiations,” Mr. Zoellick said in the letter, dated Sunday but not publicly released. The trade office released a summary of the document yesterday.
WTO and national officials quickly took notice of the proposals.
“The renewed sense of commitment expressed by Ambassador Zoellick in his letter to ministers should give the talks needed momentum as we head into a most important year for the … round,” Supachai Panitchpakdi, the WTO’s director general, said through a spokesman.
But not all reactions were positive, especially with Mr. Zoellick’s proposals on agriculture. Farm trade is possibly the most sensitive issue among the WTO’s 146 members and disagreement over rich country subsidies contributed to the collapse in Cancun.
The 15-nation European Union, the United States and Japan pay their farmers the most, while poorer nations complain that such supports lower commodity prices and take away their producers’ chance to make a living.
Responding to developing country concerns, Mr. Zoellick said nations should eliminate agricultural export subsidies, decrease and harmonize certain subsidies, and lower tariffs and other barriers that limit trade.
“Export subsidies distort trade more than any other measure,” Mr. Zoellick said.
The agriculture proposal largely took aim at the European Union, which has avoided a complete elimination of export subsidies and that pays farmers more per unit of output than the United States.
The European Union faulted the proposal for isolating export subsidies and not considering other government programs, such as export credits, a major source of U.S. support, government-run monopolies, like the Canadian Wheat Board, and export taxes.
“Thus, to focus on EU export subsidies and call for their phasing out by an end date may look as the politically correct precondition linked to the re-launching of the agriculture negotiations … but this does not necessarily make it the necessary precondition,” Anthony Gooch, a Washington-based spokesman for the European Union, said in an e-mail.
In another nod to developing nations, Mr. Zoellick said that some of the issues that led directly to the collapse in Cancun, so-called Singapore issues, should be dropped from consideration.
Trade facilitation — easing trade at the border by harmonizing customs’ rules — would stay on the agenda, Mr. Zoellick said. The other issues, which involve changing domestic laws on government procurement, competition policy and investment rules would be discussed, studied or dropped.
The Singapore issues are dear to Europe and Japan, though in Cancun EU officials offered some suggestions for compromise.
The letter also suggests that the next WTO general council chairman, head of the organization’s governing body, be from a developing country, even though the rotating position would normally go to a developed nation.
Mr. Zoellick said he would visit several national capitals in February to meet with trade officials and “to hear other ideas and assessments of how we can advance together.”
WTO members should develop a framework for further negotiations by midyear and hold a full-fledged ministerial, like the meeting in Cancun, before the end of this year, he said.
The new round of global trade rules has been a priority for the Bush administration’s trade team, though the WTO has not always backed the United States in major trade disputes.
President Bush was forced to back down on steel tariffs after a WTO decision would have allowed the European Union and other nations to retaliate with sanctions.
And Congress this year will have to respond to WTO decisions on the U.S. tax code, the distribution of tariff revenue and trade legislation dating to 1916, or face more threats.
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