A Doha Round Double Feature

♠ Posted by Emmanuel in , at 9/07/2007 07:38:00 PM
The never-ending Doha Round is entering, what, its seventh year of stalemate. The United States has upped its rhetorical offensive against the developing nation negotiating bloc led by India and Brazil. US Trade Representative Susan Schwab has suggested that they may be trying to "destroy the Doha Round" [it seems pretty broken already to me]. From the Financial Times comes this latest tale of trade woe:

The US has accused South Africa, Argentina, India and Brazil of jeopardising the Doha round of world trade talks by thwarting fresh efforts to reach a deal on cuts to agricultural and industrial tariffs.

Susan Schwab, US trade representative, said a small group of countries had the power to “destroy the Doha round” and cited the four nations as obstacles to progress.

The US is keen to advance quickly with negotiations on the basis of draft agreements advanced by the World Trade Organisation to open markets to farm and manufactured goods. But some WTO members argue that the proposed cuts that poorer nations are asked to make in industrial tariffs are far bigger than the concessions being asked of richer countries on agricultural products, thus undermining the aim of the Doha round to focus on farming as the issue of most concern to developing countries.

President George W. Bush has made reviving the talks his economic priority at the Asia Pacific Economic Co-operation summit in Sydney, which brings together 21 countries that collectively generate half of global trade.

In a speech in Sydney on Friday, he added his criticism of countries blocking progress. “No single country can make Doha a success, but it is possible for a handful of countries that are unwilling to make the necessary contributions to bring Doha to a halt,” he said. “We must focus on what we have to gain, not what we could to lose.”

He said the US was committed to seizing the “once-in-a-generation chance” provided by the Doha round to ”open markets and help millions rise from poverty”.

Ministers at the summit of Pacific Rim nations agreed on Thursday to accelerate the trade talks, which resumed this week in Geneva.

The Japanese trade minister said the negotiations were entering their final phase and called for convergence, after hearing appeals from Pascal Lamy, director-general of the WTO.

The US hopes the expression of support for the talks from Apec members – including China, South Korea and Indonesia – will help isolate those advanced developing countries resisting an agreement. [See next article.]

This week Peter Mandelson, European Union trade commissioner, said all countries had to make compromisesbut em­phasised the need for the US to offer deeper cuts in farm subsidies. “We are in a stalemate on this and I believe that the US holds the key to unlocking it,” he told the BBC.

Christine Lagarde, French economic minister, last week said she did not expect a global trade deal in the foreseeable future because the divisions among WTO members remained “too wide”.

The draft agreements were issued by the WTO after bilateral negotiations be­tween the US and the EU produced a breakthrough on farm goods, but then failed to bring about a wider deal this summer when talks were extended to include India and Brazil.

Crawford Falconer, New Zealand’s ambassador to the WTO, who chairs the agriculture negotiations, has proposed a deal under which the US would reduce farm subsidies to close to $13bn a year and the EU would cut its highest agricultural tariffs by 73 per cent.

On the other hand, the Sydney Morning Herald writes that President Hu Jintao of China has been prodded by corporate leaders into pushing for the successful completion of the Doha Round. Hu wins and Hu loses from trade liberalization? Various US cases against China at the current moment aside, it's kind of obvious as the Chinese export steamroller powers ahead. Other developing nations that are reluctant to complete Doha may have a growing fear of China:

The Chinese President, Hu Jintao, has flagged a strengthening of his country's commitment to the Doha round of global free-trade talks and raised expectations that China will offer new concessions to help get the stalled deal over the line.

Mr Hu told corporate leaders at the Asia-Pacific Economic Co-operation business summit yesterday that a successful conclusion of the Doha agreement was essential to continuing strong growth in the world's economy, signalling that China was willing to strengthen its role in the negotiations.

"The WTO [World Trade Organisation] Doha round negotiation is now at a crucial juncture," he said. "We must say no to trade protectionism, eliminate trade barriers and move the Doha round negotiation towards a comprehensive and balanced outcome at an early date."

Since its accession to the WTO, China had honoured its commitments to cut tariffs and open its economy to trade, he said, adding: "We will continue to implement a win-win opening-up strategy and support the establishment of a fair, open, equitable and non-discriminatory multilateral trading regime."

The federal Trade Minister, Warren Truss, welcomed Mr Hu's "strong statement" and "new commitment". "It will be a very valuable resource to have a more active China around the [WTO] table," Mr Truss said.

"It is a fair comment to say that, in the past, China has tended to take the view that, as a recently ascended WTO member, little or nothing could be expected of it in the way of any concessions arising out of the Doha round.

"I trust that China's new commitment to the Doha round will also include a willingness to go to the table and make an appropriate range of concessions to help achieve a satisfactory outcome."

China's move came as foreign and trade ministers called for a successful conclusion of the Doha negotiations. "An open rules-based multilateral trading system under the WTO, and the successful conclusion of the Doha development agenda, with an ambitious and balanced outcome, provides the best means for sustaining economic growth," a statement said.

The summit's ministerial meeting also finalised a report on strengthening regional economic integration, including the long-term prospect of a free-trade area of the Asia-Pacific.

Business leaders this week said APEC leaders needed to consider an alternative agreement if the Doha round failed.

Ministers addressed business's concerns about the difficulties and cost of complying with a "spaghetti bowl" of inconsistent bilateral free-trade agreements in the region by approving three "model chapters" on which new agreements could be based.

The meeting also finalised new regional measures to protect intellectual property.

■ Australia and China have agreed to regular meetings of top business leaders. A memorandum of understanding, setting out the arrangements for the Australia-China CEO Roundtable, was signed by the Foreign Affairs Minister, Alexander Downer, and China's Minister for Commerce, Bo Xilai, yesterday.

Heads of businesses will make recommendations to their governments in important policy areas, and Australian and Chinese chief executives will regularly meet senior government leaders.