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  • Feb 3rd, 2005
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Top trade officials left Davos at the weekend hoping they had given momentum to global free trade talks, but in Geneva, home to the negotiations, the pace is as glacial as the weather. As a week of bargaining at the World Trade Organisation (WTO) over industrial tariffs, a key part of the WTO's Doha Round, reached the half-way stage on Wednesday, trade sources said that there were few signs of movement.

Industrial goods account for more than 60 percent of world trade, but they can seem to take second billing to the more politically charged talks on farm reform, where negotiators have at least agreed an eventual end to rich nation export subsidies.

"It is hard to see how it is going to move forward," said one trade source who follows the industrial goods talks, but who declined to be named. "We have got virtually nowhere over the past couple of years," he added.

The round, launched in Qatar in late 2001, and well behind schedule, aims to open up markets and slash state subsidies across the globe, including in farm and industrial goods and in services, such as banking. Success could inject billions of dollars in the world economy.

But time is pressing. 2005 is turning into a 'do or die' year, with the WTO seeing a ministerial conference set for Hong Kong in December as a deadline for at least a draft accord that could open the way for a full deal next year.

The urgency is due to the fact that US President George W. Bush's powers to negotiate trade pacts without seeking Congressional approval at every twist and turn - so-called fast-track - expire in mid-2007, with no guarantee they will be renewed.

Without fast-track, trade negotiators agree, the round could never be finished.

"There is much concern ... about us taking too much time to deliver the goods," WTO Director-General Supachai Panitchpakdi warned trade ministers, who met on the margins of the annual Davos forum at the Swiss mountain resort.

The ministers responded by pledging to redouble their efforts to meet the Hong Kong target.

The Doha negotiations are what the WTO calls a "single undertaking", meaning that any deal must cover all its individual components.

There can be no pact on agriculture, for example, which is the area of greatest interest to many developing countries, without similar accords on industrial goods and services.

But on industrial goods, where the talks are the first of this year's monthly sessions, the discussions have been largely marking time since 2002.

Developing and developed countries are divided over whether there should be a commitment to cut tariffs to zero on some selected industrial products, mainly those of interest to the big economies such as the United States, such as cars.

Washington says it would not be necessary for all of the WTO's 148 member states to sign up to this sectoral initiative, but it wants a "critical mass" of countries, which would include some richer developing states such as Brazil and India.

Without such an accord, the United States says, there is no certainty that the industrial goods negotiations will lead to a real increase in market access for its major firms.

Copyright Reuters, 2005


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