By  on July 22, 2005

GENEVA — Global trade talks are in crisis because of a stalemate over farm trade issues, the chief of the World Trade Organization said Thursday.

“As I have said before, my finger was hovering over the alarm button. Now I have pressed it. I urge you all to hear the alarm and to act upon it,” Supachai Panitchpakdi, WTO director-general, told a session of the committee that oversees the Doha round.

In a speech in London Thursday, European Union Trade Commissioner Peter Mandelson said completing the Doha round “is not going to be easy.”

“A successful Doha round is going to demand a great deal of heavy lifting amongst many, from now to Hong Kong in December. There has to be mutual and balanced political pain, for mutual and ambitious economic gain,” he said.

The top EU official also alluded that Doha was being sidelined by other priorities.

“I am struck by the lack of energy shown by American and European business communities in the present round, and there is little doubt that the drive for bilateral and regional free trade agreements has adversely affected Doha,” he said.

The aim of the Doha talks launched in Doha, Qatar, in November 2001 is to successfully conclude an accord by the end of next year to lower barriers to the international flow of goods — including textiles, apparel, footwear and services — worth nearly $11 trillion a year.

However, differences between rich and developing countries led to a collapse of the talks during the WTO summit in Cancun in September 2003. The talks were put back on track last July after then-U.S. trade representative Robert Zoellick and ministers from other countries, agreed on a framework for the round.

Mandelson also voiced concern about developments in the U.S.

“In the U.S., where trade leadership was instrumental in building the open trading system after 1945, a gathering cloud of protectionism is hanging over Capitol Hill as we are witnessing in the current CAFTA debate,’’ Mandelson said. 

To advance the talks ahead of a crucial WTO summit in December in Hong Kong, WTO members agreed to try and come up with first approximations on key issues by the end of July. But senior trade officials now say it’s clear WTO members are going to fall short of their expectationsThe talks, Supachai warned, are not likely to advance in the key areas “without a willingness by participants to take political decisions that are unavoidable if we are to resolve the current impasses.”

Supachai said market access for agricultural products “is clearly where the major blockage is right now.”

Major developing trading powers such as Brazil and India have linked concessions from rich countries on farm trade as a precondition before they consider areas of interest to the U.S., the EU and Japan, such as drastically lowering tariffs and other barriers to trade in industrial goods.

Rich countries such as the U.S. and the EU are also bitterly divided over farm trade issues.

The link between progress in the so called non-agricultural market access segment and progress in agriculture, Supachai said, “remains an undeniable reality.” But Mandelson, reflecting the concerns of other industrial powers, stressed advanced developing countries in the G20 group such as Brazil and India should signal new commitments on industrial tariffs, services and rules.

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