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Trade talks in India a chance to rescue Doha

business Updated: Apr 11, 2007 17:15 IST

Reuters
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Trade ministers from the United States, the European Union, India and Brazil will this week gather for the first time in more than eight months to try to negotiate a breakthrough in world trade talks.

But few expect great strides at the meeting in New Delhi on April 12, with substantial differences over agricultural subsidies and tariffs remaining. Many say time is pressing if developed and developing nations want a deal this year.

The so-called Doha round of trade talks, which began in 2001, has been billed as a chance to boost the world economy and reduce poverty through greater trade, but negotiations have struggled to regain momentum after they broke down last July.

Thursday's round table will be the first with all four ministers from the main negotiating nations since then. At best, experts and negotiators say, it may improve the atmosphere for further dealings in coming weeks.

"We are hopeful and the very fact that everyone is getting together around the same table is a good sign," Gopal Pillai, commerce secretary, said.

"Even if it's not that you expect a total breakthrough -- but at least if it moves things forward, you can meet again a week later, 10 days later, and set this ball rolling," he said.

The sticking points remain the same as when Pascal Lamy, the director general of the 150-nation World Trade Organisation, called a halt to the talks last year.

The United States is being pressed to make deeper cuts in farm subsidies, while the EU is under pressure to reduce farm tariffs further. Developing nations, led by India and Brazil, are being urged to open their markets to more manufactured and farm goods.

Little enthusiasm

Lamy says a breakthrough is still possible but there is growing risk of failure. The White House loses "fast track" authority to negotiate trade pacts at the end of June and Congress may have little incentive to renew that power unless there are signs of a deal.

"The clock is now ticking," a statement last week from the office of EU Trade Commissioner Peter Mandelson said.

"If we are to use the remaining window of opportunity open to us, we need to intensify and accelerate the process of negotiation," it quoted Mandelson as saying. "If we fail, Doha's prospects for this year will be lost."

French Trade Minister Christine Lagarde said last week differences remained strong and prospects of them narrowing were unlikely. In Washington, experts, too, were not optimistic.

Gary Blumenthal, an analyst at World Perspectives, a Washington consulting firm, said there was little enthusiasm for cutting subsidies among US farm groups. "I just don't see a whole lot of motivation," he said.

Sherman Katz, a trade analyst at the Carnegie Endowment for International Peace, a Washington think tank, said talks had not moved on despite discussions behind the scenes since January.

"The US has been reluctant to tell our farm community that we're going to reduce subsidies without saying that we're going to get a lot more market access around the world," Katz said.

But Katz was optimistic the likes of the United States and India would feel more pressure to be flexible in a larger meeting than in one-on-one talks, and a positive outcome in Delhi would be a date for a ministerial meeting in Geneva, home of the WTO.

One industry source, who asked to remain anonymous, said negotiators have modest goals in the talks and would likely focus on specific issues in singling out goods sheltered from tariffs cuts, subsidy reform, food aid, and export credits.

"The US is reluctant to make any moves in Geneva on domestic (farm) supports until they have some hope India will be forthcoming on market access," he said.