By  on July 20, 2007

GENEVA — Reaction has been tepid to a proposal from the chairmen of the World Trade Organization's agriculture and industrial goods segments on lowering subsidies and duties for agricultural products and industrial goods, a bid to advance the troubled Doha Round of global trade talks.

The plan, introduced this week by Don Stephenson, the Canadian chairman of the industrial market access talks, and Crawford Falconer, New Zealand's chairman of the agriculture segment, came less than a month after negotiations among the U.S., European Union, Brazil and India collapsed during ministerial talks in Potsdam, Germany.

Stephenson's draft on industrial tariffs extends the time frame for lowering U.S. duties on 16 sensitive textile and apparel categories from developing countries that benefit from preferential access to six years from four years. A similar phase-in is recommended for the EU on 23 tariff lines, including eight categories of textiles and apparel.

The delay by two years would benefit countries with preferential trade pacts with the U.S., such as Lesotho, Mauritius, Madagascar, Kenya and the Dominican Republic, and, in the case of the EU, nations such as Bangladesh and Cambodia.

Stephenson's plan suggests a final duty rate for rich nations of about 8 to 9 percent, and for developing countries, between 19 and 23 percent. At the Potsdam talks, the EU and U.S. said they could live with an 18 percent maximum duty rate for developing nations, but the counteroffer by Brazil was 25 percent, along with demands for big cuts in farm subsidies by the U.S. and the EU.

Pascale Lamy, director general of the World Trade Organization, said the new texts constitute a "fair and reasonable basis for reaching ambitious, balanced agreements."

"Members will not be fully satisfied with the texts," Lamy said. "But what separates them today is smaller than what unites them."

Stephenson told reporters the proposal is a starting point for negotiations and noted it is likely to be revised "one or more times," and the final outcome "may look like this text, or it may not."

"This deal is still doable and still within the members' grasp if they want it," Stephenson said.

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