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Impasse in key WTO talks

World trade expert Professor Jim Rollo explains the current impasse between developing and developed nations over tariffs and farm subsidies ahead of crucial World Trade Organisation talks.

Chris Gibbons:
The Commonwealth secretary general is warning of a walkout from the World Trade Organisation by developing nations, as the developed world isn’t prepared to give up more than it gets. Don McKinnon was speaking in Malta, and was commentating on yet another failure by key trade ministers to achieve a breakthrough in trade talks in Geneva.
Key trade ministers met in Switzerland yesterday. They were aiming at breaking the impasse over import tariffs and farm subsidies that threaten to derail crucial talks in Hong Kong next month. Trade ministers from India, Japan, the US, the EU and Brazil are scheduled to meet yet again in early December to try and unblock the road for a final agreement at the end of next year.
But even as they do, all five are lowering expectations for next month’s big meeting when all 148 WTO member states meet in Hong Kong.
I spoke to an expert on world trade earlier, Professor Jim Rollo from Sussex University’s European Institute, and I put it to him that when we had last spoken, he suggested the entire process would end in an enormous fudge.

Jim Rollo:
I think that’s clearly what’s in mind at this point. They are pretty sure that they’re not going to reach the agreement on what’s called in the jargon, the ‘modalities’ of the negotiations at Hong Kong. So they’re trying to do something less than that, but also to signal some forward movement. They’re going to have to declare victory. Whether the victory has got any substance to it or not is the key issue.

Chris Gibbons:
It’s very unlikely at this stage, by the looks of it.

Jim Rollo:
Well, I think there may be something on what’s called a development package, which will try and be a down payment on the development agenda, on issues like aid for trade. Meaning money to help developing countries adjust to things like preference erosion and things like that. And perhaps something on cotton and perhaps something on duty free and quota free access for the least developed countries. None of those are easy in themselves, but nonetheless, they might try and do something like that.

Chris Gibbons:
I’m looking at a report in the Hindustan Times, quoting India’s Commerce and Industry Minister, Kamal Naak, who has just got back to India from the talks, and he says that to get an agreement by the end of next year, the major players in world trade, the EU and the United States, and I’m quoting here: “must make structural changes in their economies and stop subsidising inefficient sectors, especially in agriculture.” And that is the developed world’s position, it has been for a number of years, and it’s not going to change, is it?

Jim Rollo:
Well, it’s not going to change when implied directly like that. But still there are just the smallest of chances that the EU will make yet another offer on tariffs at Hong Kong, if not before Hong Kong. And that might help things move forward, but we’re not going to get a big breakthrough at Hong Kong.

Chris Gibbons:
When you talk about the Europeans making an offer, at the core of that is the French position, I guess?

Jim Rollo:
As always, as always. They’re in the front line defending the common agricultural policy. It’s going to be difficult to move them. One could imagine that if there wasn’t some more money from the EU budget for agriculture, they might be persuaded to give up something on tariffs within that sort of territory, I think. I think there may be a little bit of flexibility still in the European position, without attracting a French battle. But to get into the sort of territory that Naak and others want to get into, particularly on reducing agricultural tariffs in the EU, I think there is going to have to be a bit more from the EU than they think they can get away with at this point.

Chris Gibbons:
The voice of Professor Jim Rollo of Sussex University’s European Institute.

Source: http://business.iafrica.com

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