India, Brazil reject manufacturing concessions

India, Brazil reject manufacturing concessions
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First Published: Wed, May 09 2007. 09 28 PM IST
Updated: Wed, May 09 2007. 09 28 PM IST
Geneva: Six years into negotiations on a new global commerce pact, World Trade Organization members are still arguing over whether emerging economic powers such as India and Brazil should have to make real cuts in manufacturing tariffs _ a debate that will surely fail to impress U.S. Congressmen able to kill any new deal.
Pascal Lamy, the WTO director-general, said Wednesday that it “remains to be seen” whether developing countries would have to allow for any real opening of their industrial markets, in exchange for the significant cuts in farm subsidies and tariffs they are demanding from the US, EU, Japan and other rich nations.
Manufactured products, which comprise the vast majority of goods traded internationally, were the subject of a divisive meeting earlier this week at the Geneva headquarters of the 150-member body.
Real tariff cuts “may well be an ambition and desire of developed countries, but insisting on this as new criteria or (the) objective of the negotiations is not consistent with the mandate and is tantamount to changing the rules of the game,” South Africa said in a statement endorsed by Argentina, Brazil, China, Egypt, India and Indonesia.
The statement read out at the closed-door meeting, and obtained by The Associated Press, accused rich countries of subverting the talks known as the Doha round by seeking to advance their commercial interests instead of the original “development” goal of lifting millions of people worldwide out of poverty through free trade.
Poorer countries have focused most of their energy on agriculture, but the US and the 27-nation EU have insisted their offers to cut farm subsidies are contingent on new market access opportunities for American and European manufacturers in Brazil, China, India and other places.
Persuading a skeptical U.S. Congress that a final deal makes sense for Americans is paramount for the success of the talks, because of the June 30 expiration of U.S. President George W. Bush’s authority to send trade deals to Congress for a simple yes-or-note vote without amendments.
Bush is asking Congress to forgo its right to pick trade agreements apart line by line, making it easier to offer WTO concessions. But he faces determined Democratic resistance to any authority failing to guarantee labor standards in trade deals, a provision that would be immediately rejected by most of the world’s developing countries.
Lamy, a French Socialist and Brussels’ former trade chief, said he recently went to Washington to try and convince Congress of the merits of Bush’s proposed renewal of “fast track” authority.
“I spent two days in Congress not long ago explaining to the majority, to the minority, to the trade people, to the finance people, to the agricultural people, that my recommendation was that trade promotion authority renewal should happen as soon as possible,” Lamy told reporters. “Will we need trade promotion authority to conclude the round? Undoubtedly yes. There’s no way you can conclude an agreement without trade promotion authority.”
But Senator Max Baucus, the Democrat chairing the Finance Committee, said Monday that Congress may balk at extending Bush’s authority this year unless there was progress on some of the stumbling blocks that have held up the Doha round since its inception in Qatar’s capital in 2001.
While Congress’ inaction will make an agreement more difficult, Baucus noted that negotiators were failing to make much headway while fast track was still in force.
Agriculture has proved the most thorny issue of what has been billed as a once-in-a-generation opportunity to liberalize the global economy. Poor countries are demanding the elimination of farm trade barriers, which they say prevent them from selling their produce abroad and developing their economies. Backed by their powerful farm lobbies, rich countries such as France, Japan and the US have resisted the calls.
Last week, the WTO’s top agriculture negotiator said the US’ insistence that it be allowed to increase the amount of subsidies it pays American farmers as part of a deal is “frankly inconceivable.” Ambassador Crawford Falconer of New Zealand also said the U.S. and the EU needed to find a compromise from their extreme positions on import tariffs for farm goods.
Having already missed many deadlines, the WTO is now aiming at a year-end date for completing negotiations.
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First Published: Wed, May 09 2007. 09 28 PM IST