WTO works on deal after accepting Lamy proposal

WTO works on deal after accepting Lamy proposal
Comment E-mail Print Share
First Published: Sun, Jul 27 2008. 11 36 PM IST

Updated: Sun, Jul 27 2008. 11 36 PM IST
Geneva: Trade negotiators are hashing out the details of an agreement liberalizing commerce, even as many governments balked at the concessions required of them under proposals accepted on Saturday.
After five days of what World Trade Organization (WTO) director-general Pascal Lamy called “painfully slow” progress, negotiators from seven core countries on Saturday accepted his compromise as a basis to continue talks. Earlier on Sunday, ambassadors from the 153-nation WTO’s other governments did the same.
It is not clear if there will be an accord as many governments voice concern about aspects of the latest proposal, including the level of US farm subsidies, products that are exempt from tariff cuts and the degree of access emerging markets are offering to foreign manufactured goods.
“There were elements of this particular agreement with which members had great difficulty and elements they couldn’t accept, but they were all on board about negotiating based on the new proposals,” Keith Rockwell, Lamy’s spokesman, told journalists in Geneva.
The latest compromise requires “significant changes” as its suggestions are “poor in agriculture and substantially unbalanced” on industrial goods, Nestor Stancanelli, Argentina’s deputy secretary of state, told delegates. “Some difficult issues for developed countries have been brushed aside from the discussion.”
Pressure has been mounting on bigger developing nations such as India and Argentina to back a deal after the US made the first stab at a compromise on 22 July, saying it would cap trade-distorting farm subsidies at $15 billion (Rs63,300 crore) a year—$2 billion less than it previously offered. Under the Lamy proposal, such payments would be lowered to $14.5 billion, a 70% cut, while the European Union (EU) would slash trade-distorting aid by 80%.
Brazil, one of WTO’s key governments and head of the so-called G20 alliance of farm commodity exporting nations, is optimistic about the prospects for a deal, said President Luiz Inacio Lula da Silva.
“Divergences are normal as this involves many interests,” he told reporters in Lisbon on Sunday. “What is important is that there is the political decision that we have to do the agreement because it will be good for the world.”
WTO talks have moved in fits and starts for the past seven years as industrialized and emerging markets failed to agree on how far they needed to go to open up trade. China, Brazil and India are pushing rich nations to deepen cuts in their farm subsidies while the US and the EU have said they can do that only if they win corresponding tariff cuts for their farm and industrial exports. While “the package is not perfect” and the 27-nation EU has “considerable concerns,” all members of the bloc accept Lamy’s proposals as the basis for continued negotiations, European trade commissioner Peter Mandelson told journalists after briefing the bloc’s governments for about three hours.
“We will return to the green room tomorrow with the backing of member states to work towards a deal on the basis of this modalities package,” Mandelson said, referring to the informal, closed-door, hard negotiating session among select countries. “I cannot guarantee the outcome of that work, but we will be playing our full and committed part to that continuing negotiation.”
The WTO’s support for the latest proposals shows that “solid progress is being made,” said White House spokesman Tony Fratto, adding that large developing economies must “join a growing consensus” and help move the talks forward.
Negotiators are now meeting in smaller groups in a bid to bridge differences on areas such as tropical products, cotton, bananas and products that developing countries want to protect from competition. Lamy plans to call an informal meeting of delegation heads on Monday to assess how well the discussions have progressed.
A WTO conference on Sunday on trade in services produced what Mandelson called “interesting” offers by India and China, though he didn’t elaborate. While services such as telecommunications and banking account for only a small percentage of global trade, they account for two-thirds of the global economy.
Joao Lima in Lisbon contributed to this story.
Comment E-mail Print Share
First Published: Sun, Jul 27 2008. 11 36 PM IST