News

Bleak outlook for WTO deal

By Tobias Buck in Brussels and Edward Alden in Washington
Published: 8 December 2005, Financial Times

Peter Mandelson, the European Union’s trade commissioner, on Thursday painted a bleak picture of the prospects for next week’s World Trade Organisation meeting in Hong Kong, accusing countries such as the US, Brazil and India of not pulling their weight.
The EU’s top trade negotiator said the probable disappointment from the talks should not be blamed on Europe. “All I can say is that Europe goes to Hong Kong ready to do business with others if they are prepared to do business with us,” he said in Brussels.
The meeting of trade ministers was originally intended to agree on key parts of a global trade deal after four years of difficult negotiations between members of the WTO. But ministers have so far been unable to resolve the deep divisions that have hobbled the Doha round since its launch in 2001. Most expect the Hong Kong meeting to make little headway.
Mr Mandelson said: “The circumstances are not what I wanted. I am disappointed by what has been achieved this year. We know why: with the concentration on agriculture, important as this is, there is just not enough on the table to negotiate about.” He added: “This lack of balance has had a disastrous effect on our Hong Kong meeting next week”.
The EU is under pressure from countries including Brazil and the US to agree to allow more agricultural imports and further reduce subsidies to its farmers as part of an eventual global trade deal. Christin Baker, spokeswoman for Rob Portman, US trade representative, said that without more progress on agriculture, it would be difficult to persuade developing countries to open their markets to manufactured goods and services.
Mr Mandelson again stressed that the EU was not prepared to table a new offer on farm trade but signalled there was some margin left in the EU’s latest proposal. “We will be prepared to discuss the EU’s offer of October; to flesh it out, to answer questions, to listen to points of view and to see whether they can be accommodated.”
However, Mr Mandelson also sought to turn up the heat on Washington by highlighting the US’s lavish support for cotton farmers. “We want to help cotton farmers and we want others to follow the EU’s lead. Cotton has the potential to explode in Hong Kong if we don’t deal properly with this commodity.”
Countries such as Brazil and India will have to offer improved market access to European producers before a deal can be reached, the commissioner said. “We would like Brazil and India to make firm and clear offers that create real market access for trade in industrial goods and services. Let’s have some offers on the table,” he said.
Mr Mandelson also stressed the importance of agreeing a package of measures to help developing countries. “I hope in particular that the US and Japan will agree to grant duty-free and quota-free access to the least developed countries,” he said.
His choice of issues seemed aimed at putting maximum pressure on the US. US cotton farmers and their congressional allies are opposed to a separate deal on cotton subsidies, while US textile makers oppose the initiative to grant duty-free and quota-free access to the least developed countries

Source: Financial Times