Sarkozy threat to block talks could scupper deal: experts

Sarkozy threat to block talks could scupper deal: experts
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First Published: Thu, Jul 10 2008. 01 38 AM IST
Updated: Thu, Jul 10 2008. 01 38 AM IST
Geneva: French PresidentNicolas Sarkozy’s attacks on the World Trade Organization (WTO) negotiations could wreck the chances of reaching a new global trade deal at a meeting of leading countries this month, experts say.
By declaring that he might block a WTO deal that threatened the European agricultural programme, Sarkozy has put “another nail in the coffin of the Doha Round”, said Jean-Pierre Lehmann, director of Lausanne, Switzerland-based Evian Group of officials, business executives and experts on international trade.
“The French are a problem, but they’re not the only problem—when the American Congress voted last month for a hike in farm subsidies, it was completely incompatible with the negotiations,” he added.
The so-called Doha Round, which started at the end of 2001 in the Qatar capital, is to enter into a make-or-break series of meetings from 21 July when ministers from 30 key economies will meet in Geneva in a last-ditch attempt to hammer out a deal.
The round aims to boost international commerce by removing trade barriers and subsidies, but a deal has so far proved elusive as countries are reluctant to open up their markets or reduce financial support to farmers.
Even though the EU is negotiating the deal on behalf of its 27 member states, France—which currently holds the presidency of the bloc—could yet garner support from other EU states and block pro-WTO EU trade commissioner Peter Mandelson, noted Lehmann.
Mandelson, who has the mandate to negotiate for the EU, and Sarkozy are currently locked in a public spat over the trade talks, after the French president said he would block any WTO deal that sacrificed European farm production on the “altar of global liberalism.”
A day after Sarkozy’s declaration, Mandelson told BBC that he was “being undermined and Europe’s negotiating position in the world trade talks is being weakened.”
Sarkozy promptly retorted saying that Mandelson would enjoy the publicity created by their disagreement.
Critics say that Sarkozy’s move was driven by personal interest, as France is Europe’s biggest agricultural power and the largest recipient of EU farm subsidies, which a WTO deal aims to cut.
Figures cited by Sarkozy were also put into question by experts and the European Commission. Sarkozy had said that the WTO deal would result in a drop of European agricultural production by 20%.
The European Commission, meanwhile, estimates a decrease of just 1.1%.
“I would like to have the source of the figures cited by Sarkozy,” said economist Patrick Messerlin, whose global economic group at French elite political college Sciences Po had tabled a maximum drop of 15% for some protected sectors such as cereals.
But other products, such as pork, fruits, vegetables and wine, stood to gain from an overall worldwide tariff cut, said Messerlin.
“There are twice as many farmers in France who would lose out if we did not liberalize,” he added.
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First Published: Thu, Jul 10 2008. 01 38 AM IST