- The Washington Times - Thursday, July 24, 2008

GENEVA | China took a seat for the first time in the World Trade Organization’s most select negotiating group when seven commercial powers met Wednesday.

The meeting behind closed doors at the World Trade Organization (WTO) headquarters, in Geneva, aims to break a stalemate between rich and poor countries over liberalizing trade in agriculture and manufacturing.

China joined the United States, European Union, Brazil, India, Japan and Australia in a “G-7” meeting hosted by WTO chief Pascal Lamy.

“Of course it’s important,” Sun Zhenyu, China’s WTO ambassador told the Associated Press as he made his way to the negotiating room. “We will do our best to help conclude the trade round.”

The meeting came a day after a contentious, seven-hour gathering of at least 30 top negotiators ended with Mr. Lamy postponing a similar, large-group meeting scheduled for Wednesday.

Officials said the smaller group of seven powers — which account for the majority of global trade — would look for ways to advance this week’s crucial talks on a new global trade pact by examining issues such as U.S. farm subsidy limits and industrial tariffs in emerging markets.

The so-called Doha free trade round has dragged on since its inception in Qatar’s capital in 2001. Developing nations want agricultural tariffs and subsidies in rich countries to come down so they can sell more of their produce, while the U.S., 27-nation EU and others seek better conditions in emerging economies for their manufacturers, banks, insurers and telecommunications companies.

Beijing joined the WTO in 2001. Despite rapid trade growth in recent years, it often has taken a back seat in negotiations and allowed Brazil and India to assume leadership roles.

It has never met among such a select group of negotiators, even though its ability to export cheap goods has been a major — if often unspoken — factor in the refusal of allies such as Brazil and India to open their industrial markets.

The United States made the first significant concession of the week Tuesday, slicing $1.4 billion from any previous offer to limit contentious, trade-distorting subsidies to American farmers.

U.S. Trade Representative Susan C. Schwab said at a news conference that Washington was prepared to rewrite elements of its recently passed farm bill to ensure that U.S. subsidies deemed to unfairly enhance the competitiveness of American farmers are limited to $15 billion annually.

While Congress may view the move skeptically, the move shifted pressure to Brazil, India and other emerging economies to devise a commensurate move. They refused, arguing the U.S. offer did not cut subsidies enough.

Emerging countries have demanded a subsidy cap closer to $12 billion for the United States, noting U.S. subsidies have fallen to around $9 billion annually amid higher prices for basic commodities.

The poorer countries say the payments provide farmers in the wealthy world with an unfair competitive advantage that hinders Third World development. But the Bush administration - and the U.S. Congress - have sought flexibility in case crop prices fall and American farmers need greater support.

Congress recently overrode President Bush’s veto to pass a new, five-year farm bill worth $300 billion that maintains and in some cases extends subsidies for American farmers. It also could derail any global trade deal by picking it apart line by line, as Bush has lost the power to send Congress a deal for a simple yes- or-no vote.



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