By Gustavo Capdevila
GENEVA, Jan 19 2004 (IPS)

A stay at the tuberculosis sanatorium in the Swiss city of Davos proved beneficial for one of the protagonists of Nobel laureate Thomas Mann’s novel, The Magic Mountain.

The same Swiss alpine village, now an international ski resort, this week will host a gathering of trade ministers from some 20 countries who may be hoping the location will provide a means to reinvigorate the ailing negotiations of the World Trade Organisation (WTO).

Two years of foundering – practically since November 2001 when the Doha Development Round was launched by the WTO ministers in the Qatari capital – have seriously compromised the fate of the talks involving the organisation’s 147 member states.

The president of the Swiss Confederation, Joseph Deiss, who is also the economy minister, is confident that the meeting this week, dubbed a "mini-ministerial" because of the reduced number of participants, will kick-start the trade negotiations that suffered a major setback last September, at the full ministerial conference of the WTO in Cancún, Mexico.

The mini-ministerial is expected to turn into one of the central events of the annual meeting of the World Economic Forum, held in Davos and drawing thousands of participants, including national leaders, corporate executives, financiers and economists – the vast majority supporters of the neoliberal economic credo.

The sessions of the Davos Forum, Wednesday through Sunday (Jan. 21-25), will focus on other current issues that are closely related, such as the outlook for economic prosperity and security in the world.

In his message, Zoellick underscores the importance of progress in farm trade talks for getting the rest of the Doha Round issues going again. These include services, industrial goods, preferential treatment for the poorest countries and other even more conflictive matters, such as investment, competition rules, facilitation of trade and government procurement.

The reactions to the U.S. letter have been cautious, although some sources from countries of the developing South have noted that the proposal is along the same lines as the joint agricultural trade initiative presented by the United States and the European Union last Aug. 13 and widely seen as one of the causes of the Cancún debacle.

However, two of the main blocs of countries acting within the WTO – the Cairns Group and the Group of 20 – on Monday politely received Zoellick’s letter despite expressing some differences.

The Cairns Group of 17 agricultural exporting countries, coordinated by Australia, applauded this sign that the United States is willing to commit actively to the farm trade negotiations throughout 2004.

The group’s members are: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay.

The bloc said in a statement that it shares Zoellick’s belief "that to be successful the negotiations must result in a certain end date for elimination of export subsidies," which are a protectionist modality used primarily by the United States and the EU.

But the Cairns Group demands the same approach for farm protectionism provided through domestic supports and through limited access to national markets, which constitute the "three pillars" of agricultural trade talks, according to the ministerial decisions in Doha.

The G20, led by Brazil and with active participation by Argentina, China, India and South Africa, also praised the U.S. initiative, but noted that the bloc "will react in due course."

"Our position is well known and remains on the table," said the statement released in Geneva by the Brazilian embassy on behalf of the G20.

Neither of the two blocs commented on one aspect of the Zoellick proposal: the proposal to modify the selection process for the WTO General Council, the organisation’s highest authority, and which has caused controversy and concern among the member nations.

The chairmanship of the General Council, the institution’s power centre when the ministerial conference is not in session, this year is to be occupied by a representative from an industrialised country. The current chair is Carlos Pérez del Castillo, of Uruguay, who will leave that position on Feb. 12.

The two candidates to replace him are trade ambassadors Shotaro Oshima, of Japan, and Timothy Groser, of New Zealand.

But Zoellick advocates designating a representative from the developing South to the post.

"I suggest, given the importance of combining trade liberalisation with development, that we select a chair from a developing economy," said the U.S. trade official.

He said, "There are many skilled experienced candidates," for example the WTO ambassadors from Brazil, Chile, Pakistan, Singapore and South Africa.

But Zoellick’s suggestion mostly fell flat, a WTO official told IPS, speaking on condition of anonymity. It failed to win any support and was seen as a conspiracy, said the source.

And many interpreted the U.S. proposal as an attempt to veto the candidacy of Oshima, and stepped up to defend the Japanese representative.

The officials at the WTO recognise the weight that the General Council chair wields in negotiations. A Japanese delegate in that post could throw the process out of balance because that country is among the leaders in providing farm subsidies.

Despite the movements made in the WTO, the declarations made by Zoellick, the G20 and the Cairns Group, current chair Pérez del Castillo remains unconvinced.

The outlook for trade talks remains the same as it was in mid-December, when the WTO period of sessions for 2003 came to a close, he said in an IPS interview.

The parties to the negotiations show little willingness to make concessions or to reach a common point of understanding, he said, noting that this is the situation he will have to present to the trade ministers who gather on Friday during the Davos Forum.

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