GENEVA — Pascal Lamy, director general of the World Trade Organization, kicks off a month of “shuttle” diplomacy, meeting Japan’s Prime Minister, Junichiro Koizumi, in Tokyo today to try to get the Doha trade liberalization talks back on track.

That should be just the first stop for Lamy, as the negotiations drifted into a new crisis Saturday after trade ministers from over 60 countries — including the U.S., European Union, Japan, Brazil, India, and Australia — could not come up with a basic agreement on how to cut subsidies and tariffs for agricultural and industrial goods.

A visibly agitated Lamy admitted to reporters at WTO headquarters Saturday that the Doha talks were “on the brink of failure” and indicated he plans to “crack heads together” to move the round forward. Lamy has to try to narrow the gaps in negotiations on agricultural and industrial goods by the end of July to pave the way for a package deal to be brokered and the round to be completed by the end of the year. If a deal is not reached by then, it runs the risk of not getting to the U.S. Congress before President Bush’s Trade Promotion Authority expires in July 2007. The Trade Promotion Authority enables trade bills to be submitted for approval without amendment.

“I think it can be done, but no doubt it’s becoming increasingly difficult,” said Celso Amorim, Brazil’s foreign minister. “But now that we are in a crisis, we have to find a way to solve it.”

U.S. Trade Representative Susan Schwab, in a joint statement Saturday with Agriculture Secretary Mike Johanns, said, “We remain fully committed to an ambitious, robust round that opens new markets for the world’s farmers, manufacturers and service providers.”

Agriculture remains the primary sticking point for the round as a whole, but there is still a wide gulf between the positions of rich nations and developing countries on lowering tariffs for industrial goods.

The U.S. and the EU, backed by Japan, leaned hard on emerging countries such as Brazil and India to come forward with more ambitious offers in industrial goods but failed to secure any movement. “While a successful Doha deal is not possible without a good conclusion in agriculture, it also isn’t possible without a good deal in industrial goods,” said Frank Vargo, vice president for international economic affairs with the National Association of Manufacturers.

This story first appeared in the July 5, 2006 issue of WWD. Subscribe Today.

U.S. textile producers are pushing for special treatment for apparel and textiles in an effort to protect domestic firms and their customers in the Western Hemisphere.

At the same time, senior Asian officials indicated they expect any future deal lowering duties on industrial goods to cut deep into high and peak tariffs for products such as textiles and apparel. Indonesia’s trade minister Mari Pangestu, for one, said in an interview that weak cuts in textile and apparel tariffs “are not welcome.”

“We want tariff escalation and tariff peaks to be taken care of and high barriers dismantled,” Pangestu declared.

Equally vocal on the sidelines of the ministerial talks were poor African countries such as Benin and Zambia. Benin was adamant that it intends to keep cotton issues front and center in the talks. Zambia charged that rich countries had not followed up with concrete proposals to fulfill an earlier offer of duty free and quota free access for 97 percent of products emanating from the world’s least developed countries.

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