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UPDATE 2-US lawmakers warn Bush not to rush into Doha deal

Published 12/02/2008, 06:23 PM

(Adds comments from USTR, Senate panel spokeswoman and chief agricultural trade negotiator, starting in paragraph 10)

By Doug Palmer and Roberta Rampton

WASHINGTON, Dec 2 (Reuters) - Four senior U.S. lawmakers warned President George W. Bush on Tuesday against rushing during his final weeks in office to reach a world trade agreement that could end up being rejected by Congress.

"We have strong doubts that a ministerial meeting at this time can achieve the breakthrough that actually provides the new trade flows needed to spur the global economy and help deliver on Doha's development promise," the bipartisan group said in a letter to Bush.

The warning came as members of the World Trade Organization appeared to be edging toward a trade ministers meeting the middle of this month in Geneva to achieve a breakthrough in the long-running Doha round of world trade talks.

That has made U.S. farm and business groups nervous the White House could settle for a deal requiring the United States to cut farm subsidies and tariffs on certain agricultural and manufactured goods without major developing countries like China and India opening their markets in return.

In individual statements, the four lawmakers expressed similar concerns about the current push for countries to agree on the key details, or "modalities," of a deal.

"The current drive to establish negotiating modalities puts form over substance, and is driven by an artificial and ill-conceived timetable focused on achieving a deal regardless of its merit," said House of Representatives Ways and Means Committee Chairman Charles Rangel, a New York Democrat.

Sen. Charles Grassley, the top Republican on the Senate Finance Committee, said: "If countries like India, Argentina, China, and Brazil are finally ready to sit down and agree on ways to open up meaningful new trade flows, then that's a reason to meet. Otherwise, there's no point."

"No deal is better than a bad deal, and I have yet to see the outlines emerge of what I'd consider to be a good deal," Grassley said.

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Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and Rep. Jim McCrery of Louisiana, the top Republican on the House Ways and Means Committee, also signed the letter.

The Senate Agriculture Committee was also working on a letter to Bush asking him not to agree to a deal that so far is "not balanced from the perspective of U.S. agriculture," said a spokeswoman for Chairman Tom Harkin, Iowa Democrat.

A spokesman for U.S. Trade Representative Susan Schwab said the Bush administration would not rush into a bad deal.

"We remain committed and will only agree to an ambitious and balanced Doha outcome that opens new trade flows and generates economic opportunities in the US and worldwide," USTR spokeswoman Gretchen Hamel said.

Washington's senior agriculture negotiator said he was waiting to take stock of latest text for the WTO deal to gauge whether more ministerial negotiations could yield results.

"No one wants to take an agreement forward to Congress that would be rejected," Joe Glauber told reporters.

Congress has to approve any world trade agreement negotiated by the White House for it to take force.

There is not enough time for the Bush administration to reach a final Doha deal. But it would be politically difficult for the incoming administration of President-elect Barack Obama to turn its back on any modalities deal that U.S. trade negotiators reach this month with other major WTO members.

At a technical level, Glauber said WTO members have made progress on some issues, including temporary tariffs to be used by developing countries to protect farmers from a sudden surge in imports -- the "special safeguard mechanism" that caused talks in July to collapse.

But wide gaps remain on other issues, including a push for the United States to cut cotton subsidies, he said.

"We're not close to an agreement" on cotton, Glauber said.

(Additional reporting by Charles Abbott; editing by Mohammad Zargham and Cynthia Osterman)

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