GENEVA: World Trade Organisation (WTO) chief Pascal Lamy said on 2 July the Doha Round on cutting tariffs and subsidies risks heading into a “deep freeze” but could be saved if key countries made small concessions.
In a speech to a United Nations Economic and Social Council meeting in Geneva, he said nations digging in their heels in the nearly six-year-old negotiations could sabotage big gains to the global economy if they did not moderate their stances.
“Today the Doha Round is at a crossroad: the path towards success or the slow move towards a deep freeze,” Lamy said.
Named after the Qatari capital where it was launched in late 2001, the Doha round is meant to boost trade flows and help developing countries whose producers have struggled to overcome market barriers and price-distorting subsidies.
The negotiations have stalled over European and US farm subsidies and tariffs, and concerns among emerging nations about opening up their markets to industrial goods and services provided by firms in rich countries.
Lamy said the collapse of talks in Potsdam in late June between the European Union, the United States, Brazil and India on the outlines of a deal “could be fatal” for Doha if the four do not play a constructive role over the coming period.
The former European trade negotiator said only small moves were needed from key countries to secure an accord.
“Reaching agreement on subsidies depends on additional concessions from the US (that are) equivalent to less than a week’s worth of transatlantic trade,” he said.
Europe and Japan would need to agree to “an additional handful of percentage reduction” in their highest farm tariffs, and Brazil and India would be required to accept similar small cuts in the duties they impose on manufactured goods, he said.
“What remains to be done is small compared to all the proposals already on the table,” he said. “It is also small compared to the potential benefits of rebalancing the multilateral trading system in favour of developing countries.”
The World Bank has estimated that a Doha deal would add $96 billion to the global economy annually by 2015. Many analysts believe the biggest cost of failure in the WTO talks could be a spike in trade disputes and protectionist measures.
The WTO’s 150 members need to reach consensus on a Doha deal for it to take force.