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UPDATE 1-WTO members tackle protectionism, urge Doha deal

Published 05/26/2009, 02:37 PM
Updated 05/26/2009, 02:48 PM

* Exporters rally for Doha talks, against protectionism

* Trade system to face more stress from economic crisis

* Political atmosphere for Doha free trade deal improving

(Recasts with discussions, quotes, conference)

By Jonathan Lynn

GENEVA, May 26 (Reuters) - A group of exporting countries drummed up support on Tuesday to reach a deal soon in the World Trade Organisation's long-running Doha round as the best way to tackle protectionism in the economic crisis.

At a meeting of the WTO's General Council, several more countries signed up to or backed a document originally circulated on May 20 by 13 states, which sponsors hope will eventually be backed by all or nearly all the WTO's 153 members.

"It's a message that we should finalise the round expeditiously because that's the best measure against protectionism," Norway's WTO ambassador, Elin Johansen, who is currently coordinating the effort, told reporters.

The document appeared as negotiators talk of a growing improvement in the political conditions for a new trade deal, even if the economic crisis looks set to sharpen protectionist tensions as output falls and unemployment rises.

The improved political mood, as technical work continues quietly on areas from agriculture and industrial goods to fisheries and trade and environment, is also leading members to seek ways out of the repeated impasses in negotiations that have seen ministerial meetings collapse three years in succession.

The document was originally signed by Colombia, Costa Rica, Hong Kong, Malaysia, Mexico, New Zealand, Norway, Pakistan, Peru, Singapore, Switzerland, Turkey and Uruguay.

On Tuesday it drew support from Tanzania, on behalf of the least developed countries, Ukraine, Thailand, Israel and Taiwan among others, as well as members of the G20 rich and emerging countries such as the United States, Australia, Canada and South Korea, whose April summit pledges it reinforces.

POLITICAL PRESSURES

Tension over protectionism simmered at the meeting as Brazil read a statement on behalf of other developing country farm exporters condemning U.S. dairy export subsidies, and Argentina called for WTO monitoring of protectionist measures to focus more on the trade-distorting impact of stimulus packages.

Earlier WTO Director-General Pascal Lamy told the council that the global trading system would face added political strain as the economic crisis boosts protectionist pressures.

"While, according to some, we may be seeing the bottom of the economic crisis, we have not yet seen its full social impact which will inevitably trigger political pressures on the trade front," Lamy said, according to a text of his speech.

"I believe that the 'stress test' of the multilateral trading system is still to come."

The multilateral Doha talks were launched in late 2001 in the Qatari capital to help poor countries prosper through trade, but have faltered repeatedly.

The most recent stumbling block came last July when the United States sought a deal offering new opportunities for U.S. businesses but big emerging countries like India, Brazil and China insisted on protecting their farmers and young industries.

POLITICAL ENGAGEMENT

Lamy told the WTO membership on Tuesday the political atmosphere in the negotiations had improved this year, even though the economic crisis was getting worse.

"We have seen an increasing level of political engagement and clear signals of renewed commitment and support for a rapid conclusion of the Doha Round," he said. Lamy cited this month's much-praised visit by the new U.S. trade representative, Ron Kirk, as one factor and listed several international meetings where leaders and trade ministers would be able to negotiate Doha on the sidelines.

The council agreed to hold a regular ministerial conference in Geneva from Nov. 30 to Dec. 2 -- but it would focus on the WTO's future and the economy rather than the Doha negotiations.

Lamy touched on a new area of controversy in the talks -- a U.S.-Canadian proposal to move to negotiations on setting individual tariffs, known in trade jargon as scheduling, rather than waiting to agree on the formulas underlying tariff and subsidy cuts, known as modalities.

Because of the many exceptions to the overall formula, rich countries like the United States want to see exactly what they will get from the big emerging countries.

Lamy said WTO members should work on both approaches simultaneously. He won support from rich members like Japan and the European Union and from some emerging countries like Mexico, but other developing countries expressed concern that they could be strong-armed into abandoning what had already been agreed. (For Lamy's full speech, go to: http://www.wto.org/english/news_e/news09_e/tnc_chair_report_26may09_e.htm )

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