Washington: Months of behind-the-scenes work could lead to dramatic progress in world trade talks next week when top trade officials from the US, EU, Brazil and India meet in Potsdam, Germany, the chief US negotiator said on Thursday.
“We’re really hoping we can move the ball forward and ideally move it forward dramatically,” US trade representative Susan Schwab said in an interview.
“The United States is committed to doing our share and then some” to reach a final deal in the talks, she said.
With the US presidential election approaching and the White House’s ‘fast-track’ trade negotiating effectively expired, many believe next week’s G4 trade ministers’ meeting is the last chance for the Doha round of world trade talks launched in November 2001.
Schwab rejected that notion, but said she hoped the G4 trading partners would make progress on the “contours of a deal” they could recommend to the broader membership of the World Trade Organization (WTO).
“We have been able to demonstrate that if you keep at it and you’re willing to roll up your sleeves and get into an excruciating level of detail, you can actually make progress. And we’ve been making progress,” Schwab said.
Any breakthrough must include new market openings for services and manufacturing, in addition to cutting agricultural subsidies and tariffs, sheadded.
Recent demands by developing countries to be spared from any real cuts in their manufacturing tariffs could “be the death knell of the (Doha) development round,” Schwab said.
“I’m hoping that the serious players in this negotiation understand if you want a development outcome, you really have to cut into applied rates,” Schwab said.
WTO director-general Pascal Lamy suspended WTO negotiations in July 2006 after major trading partners again failed to agree on how far to cut farm subsidies and tariffs.
The US has proposed cutting its maximum WTO allowance for trade-distorting domestic subsidies by 53% to $22.5 billion (Rs92,250 crore). Many countries, including India, complain that actually would allow it to boost spending from current levels since the US does not meet its maximum.
The US has pressed the EU and advanced developing countries to make deeper cuts in their farm tariffs, which it says is vital to generating new trade flows and achieving the development goals of the round.
When the talks were suspended last year, Schwab said it was impossible for Washington to consider deeper farm subsidy cuts without having a much clearer idea of what new market access US farmers could gain from the round.
Trying to assess that was like peering into a “black box,” Schwab said, because of demands by developed countries such as the EU bloc to exclude many “sensitive products” from deep tariff cuts and by developing countries such as India to exclude even more “special products” from any cuts at all.
To get past that problem, negotiators have been working to clearly identify those agricultural products caught between foreign demands for increased market access and domestic demands for protection, Schwab said.
There are still big gaps over how those products should be handled, but the number of special and sensitive products hidden in the black box is much easier to see. “I think we’re definitely closer than we were last July. I think we have a better sense of where we need to go,” Schwab said.
“The United States is fully committed to this process and to making it work and being successful, including being willing to improve our offer (on domestic subsidies) with evidence of more real market access on the table,” she said.