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UPDATE 3-Freer trade viewed as economic remedy at WTO talks

Published 11/30/2009, 12:06 PM

* WTO chief says global trade deal would avert future shocks

* U.S. trade chief stresses trade benefit for jobs, economy

* Poorer states say rich nations need to break Doha deadlock

(Adds Kirk, Ashton addresses to conference)

By Jonathan Lynn and Laura MacInnis

GENEVA, Nov 30 (Reuters) - Freer trade can help create jobs and support economic growth, and tariff-cutting accords should not be scaled back on account of the global downturn, senior U.S. and other officials said on Monday.

World Trade Organisation Director-General Pascal Lamy told a WTO ministerial conference that completing the long-running Doha round would strengthen the global trading system that had helped countries come through the crisis.

But trade liberalisation had to be backed by other domestic policies to absorb the shocks of increased competition, he told the opening session of the conference.

Launched eight years ago to open markets and help developing countries prosper through more trade, the Doha talks have been extremely tortuous. Political leaders have called for an accord in 2010, but a deal is not yet ready.

"The moment of truth is fast approaching when you will have to decide whether the 2010 target can be met," Lamy told trade ministers from the WTO's 153 members.

"Political leaders are practically unanimous that they want to meet it, but reaffirmation is not enough. Now we need action, concrete and practical action, to close the remaining gaps."

U.S. Trade Representative Ron Kirk told Reuters that the ministers and senior officials gathered in Geneva needed to make sure trade can power continued growth and job creation.

"It's an important opportunity for us to reaffirm the valuable role that liberalising trade around the globe has in sustaining and promoting growth," he said.

Many countries hold the United States responsible for the lack of progress in the Doha talks, as issues from healthcare to Afghanistan have higher priority in Washington.

But Kirk told the conference the United States was ready to move into the final stages of negotiations -- provided agreement led to real new market opportunities in manufacturing and services as well as farming, the main focus of poor countries.

He repeated America's call for big emerging countries like China and India to open their markets further to secure a deal.

Outgoing EU trade chief Catherine Ashton expressed concern that negotiations were not moving fast enough to reach agreement in 2010 and said the European Union was committed to a comprehensive deal in the months ahead.

LACK OF REGULATION

Criticism of the WTO and its free trade agenda has increased over the past year following global economic turmoil which many have attributed to a lack of oversight and regulation of financial services.

This week's gathering falls on the 10th anniversary of a Seattle WTO ministerial meeting made famous by violent protests that contributed to the collapse of the conference.

A handful of good-natured protesters, accredited to the conference, demonstrated at the start of Monday's meeting.

Doha negotiations are not on the formal agenda for this week's conference because Lamy and government officials believe the talks are not ready for a high-level push towards final agreement, but that in itself is a cause for frustration.

"The agenda of this conference on its own is a great symbol of the dilemma that we are in. It's inconceivable to imagine a ministerial conference of the WTO that will not negotiate the Doha Round," Egyptian Trade Minister Rachid Mohamed Rachid told Reuters.

Developing countries issued a statement saying that rich nations needed to show leadership to advance the negotiations, and a group of food-exporting nations said it was "disappointed with the limited progress in resolving or narrowing differences" in recent months.

Development activists with the group Our World Is Not For Sale said it would be better for developing nations to walk away from a Doha deal instead of agreeing to painful cuts.

"No deal is better than a bad deal, and that's what's on the table at the moment," said Nathan Irumba, who was Ugandan ambassador to the WTO from 1996 to 2004. (Additional reporting by Jason Rhodes; editing by Crispian Balmer and Tim Pearce) ((jonathan.lynn@reuters.com; +41 22 733 3831; Reuters Messaging: jonathan.lynn.reuters.com@reuters.net ))

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