- The Washington Times - Friday, June 30, 2006

GENEVA (AP) — Presidents, prime ministers and chancellors from around the world have called a new trade deal a top priority. Their negotiators don’t seem to be able to pull it off.

After two days of hectic World Trade Organization talks, the world’s largest trading powers appeared stuck in their entrenched positions yesterday, threatening to scuttle a commerce liberalization pact that has been billed as a vehicle for lifting millions of people out of poverty.

“We are putting at risk the future of the Doha round, the WTO, and the multilateral system itself,” WTO Director-General Pascal Lamy told negotiators. “Quite frankly, it is difficult to exaggerate the importance of this round. Its potential for contributing to global growth, correcting imbalances and promoting development is obvious.”

This certainly wasn’t what Mr. Lamy had hoped for, having invited more than 60 ministers to Geneva for crisis talks on the long-delayed treaty and calling it “a moment of truth” for the WTO.

Mr. Lamy told the organization’s 149 members they needed to reach an agreement “in the coming days” on cutting tariffs and subsidies in manufactured and farm goods or risk the round’s implosion.

“This means real negotiations,” he said. “Yet, I regret to say that, at this hour, it is not clear that real negotiation will take place.”

The complex talks, begun in Qatar’s capital in 2001, have stalled as poorer countries demand that the European Union and United States agree to make greater cutbacks in their support for American and European farmers. The U.S. and EU, in turn, want major developing countries like Brazil and India to allow more foreign competition for their industrial and services sectors.

Sniping between the U.S. and EU has also held up the Doha round, which is already two years behind schedule.

World leaders including President Bush have pledged their commitment to the talks, but most countries have rigidly stuck to the same positions they have maintained for months.

“I’m asking the United States and Europe, please tell me how much you are willing to do,” said Indian Trade and Industry Minister Kamal Nath, who has twice threatened to leave the talks if the U.S. failed to improve its offer on cutting government handouts to American farmers. “I don’t seem to get an answer.”

Officials on all sides have described the gathering so far as a failed exercise, leaving countries no closer to a breakthrough on any of the contentious issues. Washington’s hard-line stance on farm-support programs has been cited as the biggest obstacle, but Brussels also has been scolded for not offering enough on cutting agricultural tariffs.

Both say they will move when leading developing countries Brazil and India open up their markets to foreign competition in industries and services.

“Last October, the United States took a risk, the risk of leadership,” U.S. Trade Representative Susan Schwab told other members. “We put a big agriculture offer on the table — expecting that it would be matched by similarly bold moves by others. Regrettably, that hasn’t happened yet.”

Brussels, however, has taken much of the heat off itself after signaling it was prepared to come close to the demand of developing countries that it cut permitted levels of farm tariffs by 54 percent.

The offer still falls far short of U.S. demands, but appears to have put the pressure on Washington to make a matching concession.

“Much is in the hands of the U.S. and they should make a real offer, to push the process ahead, and so far we haven’t seen such a move,” said Agriculture Minister Juha Korkeaoja of Finland, whose country assumes the rotating presidency of the 25-nation EU today.

A meeting yesterday among six of the world’s top trading nations — Australia, Brazil, the EU, India, Japan and the U.S. — failed to break the deadlock. Officials left a subsequent session in the evening also looking dissatisfied.

EU trade chief Peter Mandelson said there was no significant progress to report and Brazil’s top negotiator was even more negative.

“What I see now doesn’t give me any reason to believe we will make the breakthrough here,” Foreign Minister Celso Amorim said.

Unless a blueprint for a binding treaty is agreed to this summer, diplomats said the whole process may have to be put on the shelf until after U.S. presidential elections in 2008 because Mr. Bush’s fast-track authority to make trade deals expires next year.

Without that measure, which requires an up-or-down vote by Congress without amendments, it would be much harder to gain congressional approval in the United States, the world’s largest trading power.

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