TRADE-EU: Optimism Survives Another WTO Setback

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Stefania Bianchi

BRUSSELS, Jul 12 2004 (IPS) - The European Union and the United States remain optimistic that an agreement over global trade talks can be reached before the end of July, in spite of a further breakdown in negotiations over the weekend.

Trade representatives from the European Union and the United States meeting in Paris Saturday and Sunday (Jul. 10 and 11) failed to find agreement over the stalled World Trade Organisation (WTO) talks.

The WTO wants an agreement among its 147 members to cut import tariffs by the end of July.

With an end of July deadline looming, it appears that farm subsidies are yet again the sticking point of the trade talks.

"There is some convergence on various points. At the same time, I would caution that there is still a considerable way to go," U.S. trade representative Robert Zoellick said after the talks.

In May the EU angered France by proposing to drop subsidies on agriculture exports if the United States eliminated subsidised food aid and export credits, and Australia, Canada and New Zealand curbed state trading monopolies in agriculture.

The EU was pushing at this meeting for the United States to abolish export credits on farm goods which help U.S. farmers sell their goods overseas by offering low-risk loans to customers.

The United States has so far refused give much ground on this matter and accuses the Europeans of dragging their feet over proposed cuts to industrial aid.

However, in spite of a failure to advance the talks over the weekend, both the European Commission, which is the EU executive, and the European Council which represents the bloc’s member states, indicated Monday that they were optimistic that an agreement can be reached over the next few weeks.

"The EU stands united to ensure that the WTO trade talks deliver to benefit to developing countries," EU trade commissioner Pascal Lamy said in a statement Monday (Jul. 12). – I will have an opportunity to discuss this issue with my colleagues of G90 in Mauritius. I hope that this will allow us to get a step closer to make substantial progress on the negotiations at the end of July."

The negotiations were launched in Doha in Qatar in 2001. They were scheduled to conclude this year, but are months behind schedule.

Negotiators have urged more political will in restarting the Doha trade round since the WTO meeting collapsed in Cancun last September mainly over the billions of dollars a year rich countries spend on farm subsidies.

Governments have been looking again at ways to bring the talks back on track.

Officials are concerned that unless a negotiating framework is agreed by the end of July, the Doha round risks being sidelined by a new structure in the enlarged European Commission and by the U.S. presidential elections in November.

If an agreement is reached by the end of July, it will be half-way to an accord on liberalising global trade in agriculture, services and industrial goods.

EU foreign ministers meeting for the General Affairs and External Relations Council (GAERC) in Brussels Monday heard from Lamy on the results of his weekend meeting in Paris and said they broadly supported the European Commission ôboth in terms of strategy and tactics."

The Council highlighted the importance of reaching a ôsatisfactory agreement" at the WTO General Council scheduled for the end of July.

"The Council stresses the importance of achieving a balanced approach between the four areas for decision in July – agriculture, non-agricultural market access, the Singapore Issues, and development, as well as balance between the different pillars of the agriculture framework modalities, and full parallelism between commitments on different forms of agricultural export competition," it said in a statement.

Lamy and Zoellick were leaving later Monday for Mauritius to meet with trade officials from about 60 of the world’s poorest countries.

Trade Ministers of the G90 countries – comprising the African, Caribbean and Pacific (ACP) countries, the African Union, and the Least Developed Countries (LDC) – which was established unofficially at the WTO ministerial conferences held in Doha and Cancun, will adopt their position on the evolution of the WTO negotiations on Tuesday (Jul. 13) in Mauritius.

The group says the Mauritius meeting will ôformally establish the G90 for as long as it lasts to play the important role of safeguarding the interests of the developing countries at the WTO."

The group also stresses that ôa global network of negotiations" should be adopted before the end of July to prevent the development round from stalling in the coming months.

The European Council says it will hold a special session in Brussels on Jul.. 26 ôwith a view to establishing the EU position on texts to be submitted to the WTO General Council."