WTO moves to salvage collapsed trade talks

Posted in Other | 02-Jun-04 | Author: Elizabeth Becker| Source: The New York Times

WASHINGTON With little fanfare, trade ministers and diplomats have revived the global trade talks that fell apart in Cancún last year, hoping to salvage an agreement before the U.S. presidential election in November.

At the World Trade Organization, diplomats are debating a proposal this week from the Group of 20 developing nations to reduce or eliminate tariffs on agriculture, the issue that must be resolved if progress is to be made.

The goal is for the trade organization to catch up to where it should have been in Cancún by its meetings in Geneva at the end of July.

This round of talks, the Doha Round, which is dedicated to helping the developing world, got a second wind after the United States and the European Union offered new compromises in order to recover the momentum lost last September.

"There are very good atmospherics," Keith Rockwell, a WTO spokesman, said. "The long-standing problems of agricultural subsidies are slowly but surely lurching towards a solution.

A new round of talks could lead to improvements in the economies of the world's poorer countries by providing billions of dollars from trade, but only if rich nations opened up their markets to agricultural products and cut back on the $300 billion in annual subsidies they give their farmers, according to the World Bank and the Organization for Economic Cooperation and Development.

But farmers in the United States, Europe, Japan and other wealthy nations have fought against most attempts to cut their payments.

Pascal Lamy, Europe's trade minister, who leaves office in October, recently offered to end direct farm export subsidies despite public grumbling by French farmers.

In the United States, the November elections loom large in part because the states most dependent on farm subsidies are also the states that regularly vote for the Republican Party.

Yet, Robert Zoellick, the U.S. trade representative, has offered parallel reductions in farm subsidies to meet the European offer, a move that could eventually require changes in the 2002 farm bill. Moreover, Brazil has successfully sued the United States at the World Trade Organization over its subsidies for cotton, adding weight to the arguments in favor of reducing or eliminating many of the agriculture supports.

The new proposal on agricultural tariffs was the first offered by the Group of 20 that was formed at Cancún specifically to fight against rich nations' farm subsidies and farm tariffs.

Led by Brazil, India and South Africa, the group essentially seeks reductions in tariffs on agricultural goods except by the very poorest nations. Rich nations could keep higher tariffs for some of their most sensitive products, like rice in Japan.

Luiz Felipe de Seixas Corrêa, Brazil's ambassador to the World Trade Organization, who is also a spokesman for the group, said in a statement from Geneva that this was the first time that wealthy nations were ready to engage in a discussion on alternative approaches.

Developing countries that are overwhelmingly rural and depend on agriculture could reduce their tariffs at a lower rate and over a longer period of time.

The United States welcomed the proposal, but officials said much more needed to be done.

"It's very general," said Richard Mills, a spokesman for the U.S. trade representative. "What we need to do is translate general principles into specific formulas for cuts in tariffs so the Doha development agenda can open agriculture markets."

There is little time for reaching a compromise, especially since the political calendar is full of elections around the world.

European officials said they were willing to end their export subsidies so long as the United States offered similarly tough compromises.

"Frankly, we want to buy reform of the U.S. farm bill with our concessions on export subsidies and lock in these reforms," said Arancha González, a spokeswoman for Lamy.

Zoellick and Lamy have worked closely on agricultural issues, offering a joint position at Cancún.

But with the imminent departure of Lamy and a question mark beside Zoellick's name, this spirit of compromise could vanish.

"If we don't get this framework agreement in July, the work will tail off and we won't get much done until sometime much later next year," Rockwell said.