Trade powers struggle to save WTO round

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Geneva, July 22:: The United States, the European Union and emerging economic heavyweights will try again on Tuesday to line up the long-elusive trade-offs needed to save a deal to dismantle export barriers around the world.

The United States resisted calls on Monday to announce a cut in its ceiling for farm subsidies as a critical week of talks opened, saying it was ready to act as long as others do likewise, especially developing economies like Brazil and China.

The World Trade Organisation's Doha round of negotiations risks years of further delay without a breakthrough this week.

But some top trade officials doubted that would be possible, given the range of issues to be resolved and the fundamental differences that still separate rich and poor countries.

"I have to say that after today's meeting I am less optimistic than before," said Egyptian Trade Minister Rachid Mohamed Rachid after WTO chief Pascal Lamy summoned more than 30 ministers to spell out what they can do to secure a deal.

He said more talks might have to be scheduled in the coming two weeks, before Europe shuts down for the summer.

After that, the US presidential election campaign is likely to put the Doha round on ice and it could be a year or two before it can be revived, officials say, dashing hopes for a rare piece of good news for the slowing global economy.

The round was launched shortly after the Sept. 11, 2001 attacks on the United States to bolster the global economy and offer a chance to poor countries to export more and fight poverty.

But the negotiations remain bogged down, largely because many poor countries insist their rich counterparts must bear the brunt of the concessions by scaling back farm protections while Brussels and Washington are leaning increasingly on big emerging nations to open up their economies.

TRADE NOW, CLIMATE TOMORROW?

The battle at the WTO is seen by many as a test of how other global deals can be done, notably next year on climate change, given the shifting balance of power as new heavyweights such as India and China grow in confidence.

Many ministers in Geneva will be seeking a lead from the United States on Tuesday when it will again come under pressure to say how far it will lower its ceiling on farm subsidies.

"I'm sure it will come tomorrow...Otherwise it will be difficult to move a bit forward," said European Agriculture Commissioner Mariann Fischer Boel.

But US trade chief Susan Schwab said Washington would not be rushing into playing its key card in the negotiations without signs that the big emerging economies were ready to move too.

"When we address the...domestic support issue, it will address our desire to invite others to also participate in a 'can do' type of conversation, instead of a 'can't do' conversation," she told reporters.

Latest WTO proposals would require the United States to cut trade-distorting farm subsidies to a range of $13 billion to $16.4 billion a year from a current ceiling of $48.2 billion.

The range is above current US spending on subsidies of about $7 billion although the handout figure is low because global foods prices are so high.

The EU is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.