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  • Oct 27th, 2005
  • Comments Off on WTO goods talks in trouble, gloom over trade pact
World Trade Organisation (WTO) talks on goods tariffs, a keystone of the troubled Doha Round, were reported blocked on Wednesday, heightening doubts over prospects for a new global trade pact by the end of next year.

Diplomats and trade sources said negotiators were now pinning hopes on moves from the European Union in parallel farm talks to rescue a December ministers' conference in Hong Kong.

The sources said talks on Tuesday had shown rich and poor countries still at odds over how to cut tariffs on goods and by how much, to boost trade under a pact that could pump billions of extra dollars into the global economy.

The informal discussions - like ministerial-level farm talks last week - broke up with no sign that they would produce a solid result in time for December's vital Hong Kong gathering, they said.

"As I detect now, the gaps remain wide on most subjects and especially on the core issues," envoys who attended the final session on Tuesday quoted the goods talks' chairman, Iceland's WTO ambassador Stefan Johannesson, as saying.

"Time is not on our side, so it goes without saying that I am deeply concerned by the state of affairs ... If you are serious about Hong Kong you have to return to the negotiating table with a degree of realism," he added.

Envoys say the Round's negotiations on services, the third major plank of the talks launched in the Qatari capital in November 2001, are also making less headway than needed for an agreement in December.

Global trade pacts, like the last wide-ranging deal in the 1986-93 Uruguay Round, are routinely negotiated as a package deal in which countries set off losses their economies might make in one area against gains in others.

Diplomats say that if Hong Kong fails to endorse an outline for a new treaty and guidelines for the last year of the Doha negotiations during 2006, the effort could be doomed because key powers would have other priorities, and problems, in 2007.

Some voiced hope that new proposals on farm produce import tariffs expected from the 25-nation European Union on Thursday might bring a shift in that sector that would then translate into more willingness to compromise elsewhere.

On Tuesday, EU Trade Commissioner Peter Mandelson, under almost daily fire from France for giving too much, said he had won full support from the Union's executive Commission to make what officials called "a further sacrifice".

He is due to discuss his plan with counterparts in a core negotiating group - which links the EU with the United States, India, Brazil and Australia - by telephone late on Thursday, and he voiced hope it would spark movement in other Round areas.

But advance indications were downbeat. US Trade Representative Robert Portman, who has won backing from many countries for his charge that Brussels is blocking the overall Round, said the signs from the EU were "not encouraging".

And in the tariffs talks, Johannesson warned negotiators against assuming that if a farm deal came together, one would follow automatically in goods. "There is no such guarantee," he said, according to envoys present.

Copyright Reuters, 2005


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