Lamy warns of Doha failure risk

Barcelona, Spain, Mar 29 | Updated: Mar 30 2007, 05:58am hrs
World Trade Organisation (WTO) chief Pascal Lamy said on Thursday a breakthrough in troubled global free trade talks was still possible but he warned of growing risks of failure.

After nearly six years of negotiations to lift millions of people out of poverty and boost the global economy, chances of a deal before a summer deadline are fading, trade analysts warn. Success or failure rests on the political will of big trading powers like Brazil, the United States and the European Union, said Lamy, formerly the EUs top negotiator in the Doha round of WTO talks.

It is do-able, its not yet done and we need political traction for a final breakthrough, Lamy told delegates at a Barcelona retail summit.

But he added: Failure of the round is a scenario which we all need to have in mind. If we are really responsible, given the state of negotiations, we need to consider this scenario. The White House loses fast-track trade negotiation powers in June that allow it to do deals without approval of Congress. Many consider fast-track vital to the success of the Doha round and the the Democrat-controlled legislature may not renew the powers after they expire. Simon Fraser, head of cabinet to EU Trade Commissioner Peter Mandelson, said if a deal was not reached by summer it would be difficult to get talks going again before the next US presidential term. Asked about the chances of failure of the whole round, he said: It will go on if its not completed. Negotiations can make little headway until big powers break cover with whatever it is they can agree amongst themselves. Core elements of any deal are the same as they were when Lamy called a halt to the talks last July, saying the leading WTO members needed time to review long-held positions.

The United States and the EU must accept deeper cuts to farm subsidies and tariffs, while leading developing states must open up markets more for manufactured and farm goods. Lamy said the United States needed to make a new offer on reducing trade-distorting agriculture subsidies for Doha to go to final negotiations at WTO headquarters in Geneva.