Bridges Weekly Trade News Digest • Volume 11 • Number 8 • 7th March 2007

High-Level Talks Yield No Breakthrough On Doha

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The four major players in the Doha round — the US, EU, India and Brazil — met bilaterally, as well as with WTO Director General Pascal Lamy, during 3-5 March in London and Geneva. This was the first gathering of the G-4 at the ministerial level since talks officially resumed a month ago and part of an effort to charter in a breakthrough by means of ‘quiet diplomacy’ among the key players.

Following the meetings — which did not involve all four players in a roundtable — a spokesperson for US Trade Representative Susan Schwab said "Our meetings were constructive and we are continuing to make slow and steady progress." EU Trade Commissioner Mandelson agreed that "We’re in a very different place than where we were last July," referring to the breakdown of talks at the WTO at that time. Indian Commerce minister Kamal Nath commented that "Agriculture has been the most structurally flawed part of global trade and I feel the US and EU need to converge on vital issues. However, I feel confident after the talks."

The discussions did not, however, yield any breakthrough or concrete results. Top officials had met a week earlier in advance of the high-level talks, without being able to pave the way for a deal (see BRIDGES Weekly, 28 February 2007 ). A number of commentators expressed concern about this fact, given that time to conclude the Doha round is running short.

Looming over governments is the impending end-June expiry of the US administration’s ‘trade promotion authority’ (TPA). Without this mandate, President George W. Bush will lose his ability to submit trade agreements to Congress for a yes-or-no vote without amendments. Lamy believes that without TPA renewal the Doha Round may fail.

While it is not clear precisely what a ‘breakthrough’ would entail, negotiators seem to think that it would be similar to ‘modalities’ and at least provide guidance about the depth of eventual subsidy and tariff cuts, as well as the scope of exceptions.

In order to breathe life into the round, the EU is under pressure to lower agricultural tariffs, the US to cut subsidies and major developing countries to lower their tariffs on industrial goods and open up services markets.

What about transparency?

Meanwhile, countries outside the G-4 have raised concerns about being sidelined from a potential deal, or pre-deal by the four. Aftab Alam Khan of civil society group ActionAid, also said "We condemn the secretive WTO meetings this weekend among the EU, US, India and Brazil where the trade heavyweights are in danger of horse-trading away the livelihoods of millions."

African ambassadors meeting with Schwab and Lamy made the case for transparency and inclusiveness. Following the meetings, Schwab’s spokesperson Sean Spicer stressed both that a deal was far from imminent and that "We are not going to come to a breakthrough and say to everyone, ‘here is the deal, take it’."

Internal disagreements shine through

Meanwhile, outgoing French President Jacques Chirac lashed out against Mandelson, whom he accused of selling European farmers short in the Doha round talks. He said France would stand firm against Mandelson who "doesn’t stop wanting to give away more" to the US and developing countries. French Prime Minister Dominique de Villepin subsequently clarified that "France will not block negotiations, France will bring some common sense to the negotiations with a simple idea - agriculture will not serve as an adjustable negotiating item for negotiations."

The Wall Street Journal reported that tensions were growing within the Bush administration with regard to the Doha round, with some key players wanting the US to come forth with a bold offer rather than continue with the low-key negotiating strategy among the four big players.

Agriculture - the way forward

Discussions are set to continue in many fora. During a visit to Delhi, Mariann Fischer Boel, European Agriculture Commissioner, teamed up with India’s Commerce Secretary G.K. Pillai to call for further cuts to US agricultural subsidies. Pillai noted that "The whole Doha Round of trade negotiations is hostage to a handful of farmers…70% of the U.S. farmers don’t even get subsidies — It is like the tail wagging the dog."

The US has recently been pressuring India to open up its both its industrial and agricultural markets, accusing the country of intransigence (see BRIDGES Weekly, 28 February 2007 ). There has been speculation that India is becoming increasingly isolated among the four. However, specifically on relations with Brazil, Nath denied any ruptures saying that ‘There is no question of disunity. India and Brazil will continue to work together.’

Following the talks in London and Geneva, US Trade Representative Susan Schwab is due to discuss the Doha round with Brazilian Foreign Minister Celso Amorim in Sao Paolo on 10 March, following bilateral talks between the presidents of the two countries. Informal talks also continue in Geneva.

"Agriculture still stuck in trade talks: Kamal Nath," INDIA PR WIRE, 6 March 2007; "Chirac rails at Mandelson’s trade strategy," THE GUARDIAN, 5 March 2007; "EU, U.S., India try to advance global trade talks," REUTERS, 4 March 2007; "Nations Meet Amid Worry Over Trade Talks," AP, 5 March 2007; "Brazil eyes EU market access, US subsidies," REUTERS, 6 March 2007; "India, E.U. Want US To Cut Farm Subsidies," DOW JONES, 6 March 2007; "US says made slow, steady progress in WTO meetings," REUTERS, 5 March 2007; "EU digs in heels in global trade talks," AFP, 5 March 2007; "France Won’t Block WTO Deal; Looks For Common Sense -Villepin," AP, 5 March 2007.