European Union Trade Commissioner Peter Mandelson is keeping his fingers crossed. He refuses to be optimistic about whether trade talks at the WTO will resume, specially with the Democrats having taken control of the United States Congress.
While the Asia Pacific Economic Conference (APEC) statement on Saturday revived hopes, Peter Mandelson believes only a united approach by both Democrats and Republicans in the US can make resumption of WTO talks a certainty.
In an exclusive chat with Hindustan Times, Mandelson said, "We need a strong bipartisan approach by both Republicans and Democrats. I cannot say whether it will be easier or harder for trade negotiations at WTO. There are arguments both ways. I do hope US will take a united approach. Or else it will be harder for rest of us to find an agreement” he said.
Despite the uncertainties, he has not lost hope of pumping life into the WTO that has turned into a moribund body after the July 2006 collapse of talks at the Hong Kong ministerial conclave.
"I am in touch with the US Trade Representative (Susan Schwab) at one level. On the other, senior Eeropean Union trade officials were talking with their US counterparts last week," Peter Mandelson said minutes before participating in the HT leadership summit on Saturday.
The growing proximity between India and the US does not bother him. "The civil nuclear cooperation agreement between India and the US will not impact the WTO talks. It should rather be easier to resolve other issues through dialogue," he said.
But is there a meeting point between India and US on agriculture subsidies? Mandelson does not think the duo’s ambitions match. "The US has great ambitions in agriculture. India cannot take on the ambition that US is proposing. The US should, in my view, receive some comfort."
What is the first step towards the revival of WTO talks? "The US should clearly come out with what it wants to do on WTO. Everybody is watching to see if it can move towards the G-20 position on agriculture."
“The next step should come from US on farm subsidies. The US must come up with a direction." This was a clear hint that talks cannot move forward unless the US matches the EU’s July offer of cutting farm tariff by 50 per cent and trade distorting subsidies by 70 percent with a commitment to end all export subsidies on farm products by 2013.
Are there areas of convergence for India and EU on the Doha development round talks? Peter Mandelson has identified two specific areas of convergence. “Gains made by India on subsistence agriculture should stand. We need to see parallel movement in other areas of negotiations especially on industrial tariffs and services as well.”
Would he hazard a guess on when the WTO talks will be resumed? “I am not putting a timetable. The longer the wait, the more difficult will be their revival and the greater will be the loss in terms of trade for everyone,” Peter Mandelson said.
Peter Mandelson proposed that the comprehensive investment and trade agreement with India proposed at recent Helenski conclave should be concluded by end 2008.
“The bilateral deal (between India and EU) is within the WTO rules. It is not a stumbling block for WTO. It would only add to the sum total and not divert the trade. Beginning 2007, clear goals for the deal should be set.
“Another one year should be the outer limit to conclude the deal. We need to work with focus and discipline”.
One area that seems to be bothering Peter Mandelson vis-à-vis India is the high duties imposed on wines and spirits exported from Europe. "This is a matter for India to address. The issue should to be resolved between Finance Ministry and states. India should devise an alternative to these duties as they are not WTO compliant."
On the services front, Peter Mandelson hinted that India was conservative in opening up while it has a distinct advantage. “Services sector is very important. It provides the backbone for the economic activity as it involves transfer of technology, capital and skills,” he said.
“We both (India and EU) want other partners (read US) to be more open and make better offers in this area of negotiations. This is a major growth area for India and its greater opening up would help building trade in services for every one”.