TRADE: Talks Getting Harder to Pull Out of the Fire

By Sanjay Suri Reprint | | Print |

Sanjay Suri

LONDON, Mar 13 2006 (IPS) - Development groups are holding on to a faith in progress on the world trade talks, but amidst growing apprehension that it may not come.

The new pessimism follows the failure to break the deadlock at the six- party talks, the ‘G6′ as some call it, in London over the weekend.

Representatives from India, Brazil, the European Union, the United States, Japan and Australia could report little movement forward after more than 12 hours of talks.

The talks sought progress on a new world trade agreement through the impasse that arose at trade ministers’ conference in Hong Kong last December. The London consultations are not officially a part of the world trade talks, but the presence of World Trade Organisation (WTO) chief Pascal Lamy was only one sign that this was a significant informal process to work towards a WTO agreement by the end of April.

This does, however, look unlikely. Representatives of the developed countries offered nothing new by way of a reduction of agricultural subsidies and a speeding up of the timetable to carry these out in time. In turn Brazil and India offered no concessions by way of opening their markets to industrial goods and services from the developed countries.

”We are disappointed by the absolute lack of give from the EU and the U.S.,” Alex Wijeratna from ActionAid told IPS. ”We want the EU and the U.S. to back off significantly, to show much greater commitment to the concept of development, but they are simply not doing it. This is a big disappointment, though not a big surprise.”

The EU and the United States were looking for ”a simple trade-off that developing countries like India and Brazil open up their markets for industrial goods, without going much further in agriculture,” Peter Hardstaff from the World Development Movement, a development-focused non- governmental organisation told IPS.

”What is on the table is essentially a bad deal for developing countries that will mean a long-term loss of policy options for them,” Hardstaff said. ”Our assessment has always been that no deal is better than a bad deal.”

Pressure for an agreement has been building up ahead of WTO talks due at the end of April and again in July towards completing an agreement by the end of the year.

That assumed deadline for an agreement has arisen because time is running out for a U.S. fast-track requirement to present a deal to the U.S. Congress for approval by the middle of next year, Hardstaff said.

”This is now the big decision time whether to have a deal at all or to call it a day and think of some other way,” he said. ”What is critical is not having some deal at any cost, but seeing what kind of deal it could be.”

In that deal development groups want the developed countries to remember that this round of talks was called the Doha Development Round after it was launched in the Qatar capital five years back. The idea was to build a trade deal that would give developing countries a chance to develop through trade.

”That development idea has gone out the window this past year,” Hardstaff said. ”But developing countries have a right to pursue the policies that the now developed countries did when they were developing.”

That India and Brazil did not back down through the weekend talks is a good sign, Wijeratna said. The talks had shown ”a sense of mature, equal negotiating, it does not feel like there is any junior partner in these discussions.”

The weekend discussions had ”brought a sense of confidence about India and Brazil, they seem to be working extremely well as a unit,” he said. ”We would like to see India and Brazil do more and more for development.”

But while they held firm there is an increasing sense of jeopardy about the talks. ”It is difficult to see anyone pulling them out of the fire,” he said.

EU trade commissioner Peter Mandelson said ”incremental” progress was made at the talks. There was no agreement on this either. Brazilian foreign minister Celso Amorim told reporters that ”we have been working in an incremental way, and I don’t believe we can get a deal in incremental steps.”

Amorim added, ”What is lacking is the deep conviction that if we don’t have an ambitious result, we won’t have any result at all.” Indian trade minister Kamal Nath said the developed countries ”need more comprehension.”

The six made it clear that they will talk again before formal WTO talks in April. To what end, is less clear.