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U.S., EU Intensify Pressure on Emerging Nations

GENEVA ? Talks among ministers from 35 key trading nations started in a heated atmosphere Monday.

GENEVA — Talks among ministers from 35 key trading nations started in a heated atmosphere Monday. The European Union and the U.S. signaled that a breakthrough global trade deal can only be reached if major emerging countries make more liberal offers to open their markets to industrial goods, including textiles.

This story first appeared in the July 22, 2008 issue of WWD.  Subscribe Today.

But emerging nations led by Brazil, China and India countered that rich nations needed to come forward with more ambitious offers to slash trade-distorting agriculture subsidies and tariffs, and lower other barriers to industrial products.

“We are at the beginning of an uphill journey, which will take us a few days,” said Pascal Lamy, World Trade Organization director general.

Lamy believes there’s a better than 50 percent chance that the meetings can establish a blueprint to lower barriers to agriculture and industrial goods. But the U.S. and EU firmly believe that a deal is only possible if key emerging nations don’t hold out.

“It is not just one, two or even five members or groups of members that hold the key to success,” U.S. Trade Representative Susan Schwab told the opening session of the WTO-sponsored Doha Round trade talks.

Schwab indicated that the talks can only succeed if key fast-growing economic players “come forward to contribute.”

EU Trade Commissioner Peter Mandelson is under pressure from many EU member countries, such as France and Germany, to deliver new commercial market openings in emerging markets. He stressed that the EU needs to know up front that the flexibilities for the timing of tariff cuts allowed for developing nations in the nonagricultural market access segment, or NAMA, will not carve out exceptions for vital sectors such as textiles.

“We have no idea in NAMA which products will be sheltered,” Mandelson said. “This has left us far too little clarity as to what exactly we can expect to gain from the Round. Why should European industries like cars and textiles see their tariffs slashed to less than 6 percent at home while the tariff protection of the same sectors remains untouched in the fastest-growing economies in the world? These cuts must provide some new market access in practice.”

Emerging nations’ ministers and top trade envoys brushed aside the EU ultimatum.

“The attempt to extract an additional price in terms of anticoncentration or disguised mandatorial sectorials would overload the negotiation and make a conclusion impossible,” said Brazil foreign minister Celso Amorim.

Chief negotiators from the so-called NAMA 11 group spearheaded by South Africa and Argentina were even more adamant in their opposition.

“We are not going to meet these expectations,” said a senior Argentine envoy, who did not want to be named.

Ebrahim Patel, general secretary of the Southern African Clothing & Textile Workers Union, said in an interview that the “anticoncentration” would take away the flexibilities needed to shelter problematic sectors such as textiles and apparel, and automobiles.

He said that since 2004, the textile, apparel and footwear sector in his country has lost 55,000 jobs and he noted that the national unemployment rate is at 23 percent. He said the country’s electronic sector also has been “virtually wiped out because of China, China, China.”

Chen Deming, China’s minister of commerce, said the interests of developing countries “are yet to be addressed” in some areas of the talks, such as agricultural subsidies, and said the issue of cotton in the farm talks “must be effectively addressed.”