More to explore for world trade deal: EU

More to explore for world trade deal: EU

Geneva: The European Union presented a last-minute plan to keep hopes alive for a new global free trade deal on Friday, saying there were still avenues of negotiation to explore after 10 years of trying.

Unveiled at a meeting of World Trade Organization (WTO) member countries, the plan aims to find some middle ground between the United States and major emerging economies, especially China, on the main sticking point of the discussions - tariffs on industrial goods.

“Our view has always been that not all options and avenues, in this market access area had been explored," said Jean-Luc Demarty, European Commission Director General for Trade.

“This is why we felt we should formulate ideas to stimulate further engagement," he told the meeting of the 153-member WTO’s Trade Negotiations Committee. Gaps can close “if the political will is there," he said.

The so-called Doha Development Round of talks which began in 2001 in the Qatari city are complex and cover all areas of barriers to trade in industrial goods, services and agriculture, but the industrial tariffs row goes to the core of the blockage.

China, India and Brazil entered the talks with developing country exemptions which the United States now challenges given their emergence as export powers.

Developing nations want to keep their status and point out that the round was launched partly to correct some of the trade imbalances of the existing General Agreement on Tariffs and Trade.

The EU plan, which aims to succeed where months of US - China bilateral talks have failed, did little to lift the mood of despondency at the WTO’s Geneva lakeshore headquarters.

Several diplomats used the word “disappointment" to describe their feelings on the failure to produce any real movement since the last push for completion took place in 2008.

Some farm export countries were sceptical of the EU’s motives. One said the EU may be looking to distract attention from its own sins against free trade in farming subsidies.

Still, diplomats were “appreciative that the EU has revived the spirit of the talks," said one ambassador from a G7 nation.

The EU’s proposal, a copy of which was obtained by Reuters on Thursday, focuses on tariffs for chemicals, machinery and electronics and seeks an approach that is tailored for different products, keeping the zero-for-zero tariff approach favoured by the United States for some, but nuancing it for others to a tariff level somewhere between what the big developing countries have to deliver according to their status, and the zero that the United States wants to see.

The United States said it would be studying the idea. “We can’t know what the outcomes might be but we can certainly know very quickly whether or not it can catalyse negotiations," US ambassador Michael Punke told reporters.

Inside the meeting, he reminded negotiators that the industrial tariff issue was not the only stumbling block facing the talks. He pointed to wide rifts on agriculture and services.

China’s Ambassador YI Xiaozhun made no direct reference to the EU plan in his statement to the meeting, but bemoaned a loss of idealism in discussions over the years.

“Negotiations seem to be diverting away from the development mandate and towards market access," one trade official quoted him as saying. India also criticised the increasingly “mercantalist" approach to the talks.

The Doha talks aim to keep at bay the self-defeating spiral of tariffs, subsidies and quotas that can choke trade and, economists argue, global prosperity.

With $15 trillion of goods changing hands last year around the globe, no country wants to be blamed for stabbing the policeman of commerce through the heart.

Some delegates wanted to make clear that the WTO itself is “bigger than Doha" - a clear suggestion that they still fear failure for the round and are looking at damage limitation.

Others suggest an “early harvest" where those areas where negotiators agree go ahead without the tricky ones.

WTO Director-General Pascal Lamy, who has staked his reputation on getting a deal done this year, begged countries not to return to the “law of the jungle".

Lamy told delegates on Friday that from here on he would consult in various configurations, including at the ministerial level, in APEC and at an OECD meeting on 26 May.