GENEVA — European Union trade commissioner Pascal Lamy said Tuesday that the elimination of all import duties on selected industrial products — including textiles, clothing and footwear — “is out of reach” due to strong objections by a group of developing nations that appear to be gaining significant clout in World Trade Organization talks seeking to further liberalize global trade.
Officials from the U.S. and Canada, which, along with Japan, have supported the push to eliminate tariffs, were taken aback by Lamy’s statement and indicated they would push onward, despite his new position.
Lamy cited “G-20 hostility” as the reason for his stance. The G-20 — an informal alliance in the global trade talks that includes Brazil, India, Argentina, China, Malaysia, the Philippines, Indonesia and South Africa — has emerged as a formidable counterweight to the U.S. and the EU in the global talks. Members of the group walked out of the September round of WTO talks in Cancún, Mexico, leading to the premature end of that meeting.
Lamy said, “My sense is that mandatory sectoral negotiations are out of reach, notably because of the G-20 position.”
He said he would be willing to continue negotiations on sectors where the developing nations were willing to discuss the elimination of tariffs, but added: “My sense is that there won’t be much of that.”
Recent WTO discussions have centered on scrapping duties in eight industrial sectors — including textiles and clothing — that together are worth more than $1 trillion in trade. International trade in textiles and clothing alone is worth $353 billion. Other sectors of interest include automotive products, footwear and electrical and electronic goods.
When the 147 nations of the WTO drop their quotas on textiles and apparel on Dec. 31, tariffs will remain as the sole major system of regulating imports of those goods.
In response to Lamy’s comments, Sergio Marchi, Canada’s WTO ambassador, said, “We still think sectorals are important and we’re not prepared to give them up.”
Likewise, a U.S. trade official in Geneva, who spoke on the condition of anonymity, said the U.S. remained committed to the goal. “We have to figure out a way to get critical mass,” he said.
U.S. Trade Representative Robert Zoellick earlier this month said the negotiations would need “critical mass” to get started.
His point was that all the major trading partners involved in a given sector of goods would need to be ready to discuss duty elimination before talks could really get started.
In a letter to WTO trade ministers earlier this month, Lamy said the market access talks on industrial goods “have lost momentum and must regain it because we know this is where the gains in the round will be the greatest.”