GENEVA — Ministers from 60 countries begin three days of crucial talks here Friday in a bid to clinch a breakthrough deal on lowering tariffs for agriculture and industrial goods.
“Postponing decisions on the cuts to subsidies and tariffs until later in the year is a recipe for failure,” said Pascal Lamy, World Trade Organization director-general.
Lamy said he viewed the pending ministerial talks as a “moment of truth” for the WTO’s 149 member countries, and he stressed that “We need ministers to crack the nut now and not later.”
The Doha Round talks, launched in November 2001, face an end-of-year deadline. Differences over politically sensitive sectors like textiles and apparel and cotton are also slated to feature prominently in the talks. WTO ministers failed to meet a self-imposed deadline set during a Hong Kong summit in December to broker a deal by the end of April on modalities for agriculture and non-agricultural market access or NAMA.
Envoys from small and large trading powers were divided over whether the gathering would secure a breakthrough deal. Manuel Teehankee, ambassador from the Philippines to the WTO, said he was “cautiously optimistic” WTO members could come to a pragmatic agreement.
A number of envoys downplayed the prospect that a deal would be reached during the current session, but at the same time they did not rule out the possibility that one could be hammered out by the end of July.
“The gaps are still far apart [over agriculture)],” said a senior trade envoy from a developing country, who spoke on condition of anonymity.
The same envoy indicated that more movement was needed by the U.S. on domestic farm subsidies, and by the European Union on bigger tariff cuts for agricultural products, for a deal to fall in place.
A senior European trade diplomat said that on agriculture, the hands of U.S. Trade Representative Susan Schwab “are tied by Congress.” Similarly, some envoys are of the view that the EU is held hostage on agriculture by protectionist members led by France.
Remarks in Washington on Tuesday by Sen. Saxby Chambliss (R., Ga.), chairman of the Senate Agriculture Committee, that the U.S. will not accept “an early harvest provision for cotton,” drew a strong response from African cotton exporters, led by Benin.
“Millions of small farmers are dying,” said Samuel Amehou, Benin’s WTO ambassador. “It’s not an issue to play with. We count on the U.S., as a big nation, to treat the cotton issue as a humanitarian problem.”
Benin, along with Burkina Faso, Mali and Chad, have spearheaded efforts in the Doha talks over cotton and have secured a commitment that it will be dealt with expeditiously. But Chambliss was adamant that cotton needs to be “treated fairly and equitably, like every other crop.”
In Washington on Wednesday, Sen. Chuck Grassley (R., Iowa) said he told Schwab she should get more concessions from India and Brazil on opening their market to U.S. agriculture exports or “walk.”
West African envoys counter that this falls short of what was agreed to by trade ministers during the Hong Kong summit, when they said “trade distorting domestic subsidies for cotton production be reduced more ambitiously than under whatever general formula is agreed and that it should be implemented in a shorter period of time than generally applicable.”
Ministers are also expected to lock horns over how textiles and apparel should be treated in the industrial tariffs segment, with Turkey leading the charge in a bid to secure “special consideration” for the sector. In the talks, Turkey has presented a proposal supported by U.S. textile industry groups that calls for harmonization of textiles and apparel tariffs, which experts say effectively would result in lower cuts than would be achieved under a NAMA formula.
Turkey, backed by small textile exporters such as Jordan, Tunisia, El Salvador, Honduras and Nicaragua, is expected to face a wall of opposition from many major textile exporting countries in Asia that believe a NAMA formula would bring down high tariffs in the U.S. and the EU.
Gusmardi Bustami, Indonesia’s ambassador, said textiles and apparel should be part of a general NAMA formula that “includes all products, without exception.”