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SNAP ANALYSIS-Another Doha pledge, but will negotiators move?

Published 09/25/2009, 08:04 AM
Updated 09/25/2009, 08:09 AM
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By Jonathan Lynn

GENEVA, Sept 25 (Reuters) - World leaders promised to work as "quickly as possible" to conclude the World Trade Organisation's long-running Doha round trade talks, and will take stock of progress early next year, a draft G20 document at the Pittsburgh summit said on Friday.

* The pledge reaffirms the goal of completing Doha in 2010 laid out by leaders at the L'Aquila summit in July and repeated by key trade ministers in New Delhi earlier this month.

* The question is whether they will order their negotiators in Geneva to put that pledge into action by showing enough flexibility to compromise on the remaining differences.

* The Doha talks, launched in late 2001, are the longest trade round and have missed many self-imposed deadlines. Members came close to a deal in July last year and WTO Director-General Pascal Lamy reckons 80 percent of the deal has been agreed.

* Estimates of the value of a deal, which would be phased in over several years, vary. The most recent, by Washington's Peterson Institute for International Economics, says it could boost world GDP by $300-700 billion a year by cutting farm subsidies and industrial and agricultural tariffs, freeing up trade in services and helping developing countries trade more.

* The United States is pushing big emerging countries like China, India and Brazil to open up more so the White House can argue to Congress the deal will create opportunities for U.S. businesses. Developing countries, who say they are supposed to be the main beneficiaries, say this puts too big a burden on them.

* The Pittsburgh wording represents a compromise between the United States and other trading powers seeking a commitment to faster progress. The European Union, Australia and Brazil wanted a deadline for early 2010 to reach a breakthrough on the formulas for cutting subsidies and tariffs in the core areas of agriculture and industrial goods. The United States resisted this pressure because of concerns in Congress about trade, according to European sources.

* Once those formulas, known as "modalities", are agreed, it will take many months to translate them into a detailed trade deal covering every product, and to negotiate the remaining areas of a deal, from services to rules on unfair imports. Failure to wrap up modalities later this year or early next would jeopardise the 2010 goal for an overall deal.

* In anticipation of a breakthrough, the WTO is training developing country members on the technicalities of applying the formulas to individual products, a process known as scheduling.

* There is broad agreement on the overall shape of modalities. The differences arise in the exceptions to the formulas that rich and poor countries and some individual developing countries could apply.

* One sticking point is a proposal supported strongly by the United States for some groups of countries to go beyond the formula and eliminate tariffs in some industrial sectors, such as chemicals. Emerging countries are suspicious of this.

* The contrast between the deadlock in negotiations in Geneva and the pledges from leaders has led both negotiators and ministers to complain openly about a disconnect in the talks.

* Key trade ministers agreed in New Delhi earlier this month to intensify the talks in Geneva, bringing in senior officials from state capitals regularly, to break the deadlock.

* The officials agreed last week on a packed schedule, but in intensive talks this week on industrial goods there was little movement on either non-tariff barriers or sector deals, where members did exchange information about the shape of possible deals, but did not report any progress while Brazil said its economy would suffer from them.

* The Pittsburgh agreement to review progress early next year also represents some slippage. WTO chief Lamy said on Tuesday members should be able to take stock in December.

* A long-delayed ministerial conference of the WTO, to be held from Nov. 30 to Dec. 2, is not intended to negotiate a trade deal but ponder the long-term role of the WTO.

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