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South-South trade seen attracting WTO waivers

Published 06/29/2009, 12:49 PM
Updated 06/29/2009, 12:57 PM

* Poor states could use WTO flexibilities against each other

* Growth of South-South trade changes Doha talks perspective

* Clarity emerging on sector deals

* WTO plans training on scheduling

By Jonathan Lynn

GENEVA, June 29 (Reuters) - Big developing nations could use waivers under a new World Trade Organisation deal to block each other's trade, a senior WTO diplomat said on Monday, potentially complicating the long-running talks -- or throwing them open.

The United States and other rich countries have been saying that in order to take the WTO's Doha round forward they need to know where big emerging countries like Brazil, China and India would use the tariff cut exceptions they would be entitled to.

Luzius Wasescha, the Swiss WTO ambassador who chairs negotiations on freeing up industrial goods, said the growing volume of South-South trade meant some developing countries may use their waivers to block competitive imports from each other rather than targeting sales from rich countries.

"The big issue is where will emerging markets apply the flexibilities," he told reporters.

Wasescha was talking after a meeting of the WTO's 153 members to discuss the next moves in the industrial goods talks, after trade ministers called last week for a revival of the nearly 8-year-old Doha round.

"People want me to move forward, but I'm not sure whether they will follow me," Wasescha said.

Trade ministers hope that kick-starting the negotiations in Geneva will allow them to hold out the prospect of a deal next year when leaders of the G20 rich and emerging countries meet in Pittsburgh in September.

SECTORAL DEALS

The Doha talks were launched in the Qatari capital in late 2001 to help poor countries prosper through trade, and have faltered since then, particularly over differences between rich and developing nations.

But Wasescha said sectoral deals -- one issue on which a meeting of ministers collapsed last July -- were showing signs of progress.

Sectoral deals would be voluntary agreements among groups of countries to eliminate duties completely or almost entirely in individual industrial sectors like chemicals or bicycles, beyond any overall reduction in tariffs that all WTO members agree.

The United States sees sectoral deals as offering the best chances of new export opportunities for American business. But while some developing countries are also keen to propose them, China and some other big emerging countries are wary of being pushed into something going beyond the overall deal.

Wasescha said proponents of sector deals in fish, electronics, textiles, chemicals, machinery, forestry products, jewellery and healthcare had been crunching tariffs and trade data to show other countries exactly what was at stake.

"They can really start to work on this basis to try and convince others that on the basis of the facts they would have an interest to join such a sector, which is the prerequisite to move forward," he said.

Besides sector deals, more work is needed in the industrial goods talks on non-tariff barriers -- rules such as safety standards that hamper imports -- and waivers for individual countries who are asking for special treatment, he said.

In a sign of confidence that a Doha deal will emerge eventually, the WTO is organising a training session for developing countries next month on "scheduling" -- the detailed and time-consuming business of translating a blueprint agreement into individual tariff cuts for each country and each product.

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