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U.S., Canada and EU Offer Tariff-Cut Deal

WASHINGTON — The U.S., Canada and European Union presented a joint proposal Tuesday on lowering tariffs on industrial products, such as apparel and textiles, in an effort to jump-start stalled discussions on opening markets in the global round of...

WASHINGTON — The U.S., Canada and European Union presented a joint proposal Tuesday on lowering tariffs on industrial products, such as apparel and textiles, in an effort to jump-start stalled discussions on opening markets in the global round of trade talks.

Negotiators from 146 countries deadlocked last May on how to reduce and eventually eliminate industrial tariffs in the current World Trade Organization round of talks, and the U.S., Canada and EU attempted to nudge the talks forward with their blueprint in advance of a crucial meeting of ministers in Cancun next month.

The three trading powers did not offer a time frame or figures for tariff elimination in the joint paper, which Peter Allgeier, deputy U.S. Trade Representative, called “a simple, ambitious, harmonizing formula” that is intended to lead to steeper cuts on high tariffs. The U.S. originally proposed eliminating tariffs on all industrial goods, including apparel and textiles, by 2015.

Allgeier said the joint-formula approach to cutting tariffs must be balanced by “special and differential treatment” for least-developed countries, which means some of the poorest countries could negotiate longer tariff phaseout schedules.

This new proposal could still be a hard sell to make to developing countries. Poorer WTO members have resisted opening their markets to developed countries’ products and argue tariffs are an important source of revenue.

“What we attempted to do in this paper is provide a way for a high level of ambition and yet be sensitive to various concerns and sensitivities of developing countries,” Allgeier said on a conference call. “Rather than reducing everything to the lowest common denominator, the way is to have flexibility built into the negotiations.”

The U.S., Canada and the EU are still pushing the controversial proposal to eliminate all duties in various sectors, including textiles, clothing and footwear. However, India and other developing countries have stressed that a sectoral approach to tariff elimination should be voluntary.

“What we have heard for decades from countries that are exporters of textiles and apparel is that is their primary area of competitiveness,” Allgeier said. “But they have been frustrated in exercising their competitiveness by barriers in developed countries.”

Allgeier said the U.S. is willing to open its textile and apparel markets to foreign competition in the form of eliminating tariffs, provided that other countries “open their markets and ideally eliminate tariffs.