- The Washington Times - Saturday, July 19, 2008

Officials from 35 nations will converge Monday in Switzerland to try to revive the on-again, off-again Doha round of trade negotiations.

The nearly seven-year-old multilateral trade talks have been on life support since they collapsed two years ago. A major breakthrough leading to a quick agreement is unlikely, analysts say.

“Count me among the many skeptics,” said Gary Hufbauer, a senior fellow at the Washington-based Peterson Institute for International Economics.

A major breakthrough “will surprise me and many others,” he said. “Almost anything they do in Geneva will be scraping out the basement.”

“We go with the intent to do a deal,” U.S. Trade Representative Susan C. Schwab said Thursday before leaving for the Geneva headquarters of the World Trade Organization (WTO).

Mrs. Schwab pledged to seek “a successful breakthrough that has eluded us over and over again,” but she emphasized that the U.S. “can’t do it alone.”

Since WTO Director-General Pascal Lamy suspended formal negotiations, enough progress has been made to reduce trade barriers between the European Union and the United States that he has decided to give the talks another try.

When talks broke down, mostly over farm subsidies and tariffs, there was an “infinite number of open issues,” Mrs. Schwab said. As recently as May, at least 200 unresolved issues remained.

“Today, we estimate there are 30 outstanding issues in agriculture and [manufacturing],” she said.

Itemizing the hurdles that negotiators will face in Geneva, Mrs. Schwab said it was “inconceivable to have a successful outcome to the Doha round if emerging markets are not making important, meaningful … contributions in all three pillars of agriculture, manufacturing and services.”

Soaring prices for many agricultural commodities during recent years will make it easier for the United States to comply with any agreement that would reduce farm subsidies.

“If prices remain within the relatively high range of the past two years, the United States would not even come close to violating the trade agreement” that limits overall trade-distorting farm subsidies to $7.6 billion, said David Orden, a senior research fellow at the International Food Policy Research Institute, a Washington think tank.

Intense opposition at home, however could torpedo any agreement, warned Mr. Hufbauer of the Peterson Institute. Meanwhile, Canada and Brazil are challenging the United States at the WTO over its direct payments to farmers.

In return for their concessions on farm subsidies and tariffs, the United States and the European Union have demanded that about 30 advanced developing countries reduce their tariffs on industrial products including autos and chemicals. Brazil, India and others are resisting, fearing that a big reduction in tariffs would hurt their nascent manufacturing industries.

In addition to their reluctance to reduce tariffs on industrial products, “Emerging markets are not even willing to put services on the table,” further complicating the agenda in Geneva, Mr. Hufbauer said.

Mrs. Schwab emphasized that 80 developing countries will be asked to sacrifice little or nothing in the Doha round.

“Those countries are the ones to be the beneficiaries of the round,” she said. On the other hand, she said, “70 percent of tariffs paid by developing countries are paid to other developing countries.” Thus, even poor developing countries could benefit by reducing tariffs.

The Geneva stakes go beyond trade. In Brussels, Peter Mandelson, the European Union’s chief trade negotiator, told the Financial Times on Thursday: “If, collectively, we fail this test in Geneva, it will reduce our ability to pass future tests on climate change, food security, energy security and other issues.”

Even so, the incentives to compromise may be weak. With President Bush leaving office in six months, “the motivation to negotiate with the United States is very low,” Mr. Hufbauer said. “The Bush administration could promise the moon,” he said, “but there is no realistic expectation that it could deliver a satellite.”

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