DAVOS, Switzerland — Major industrialized and developing countries — including the U.S., the European Union, Brazil, and India — gave the green light here Saturday for the suspended Doha global trade talks to restart.
However, it’s still uncertain if a breakthrough deal can be reached in the next few months. Much will depend whether the positions of the key players converge, trade ministers and senior officials said.
Pascal Lamy, chief of the World Trade Organization, told reporters at the close of the annual World Economic Forum this weekend that trade ministers from 30 countries had reached a consensus to resume the global tariff-lowering talks.
However, a spokesman for U.S. Trade Representative Susan Schwab said, “Formal negotiations have not restarted. There was a strong sense of optimism coming out of Davos and a strong desire for ministers to keep working in order that we could sometime in the future restart formal negotiations.”
The spokesman said progress was being made and that discussions were ongoing at the staff level.
“The bottom line is that work is being done and progress is being made.”
Launched in Doha, Qatar, in 2001, the talks are intended to lower global trade barriers and give a boost to developing countries’ economies but the discussions have hit numerous roadblocks.
Lamy suspended the trade round last July after key players, including the European Union and United States, came to an impasse over cutting politically sensitive agriculture subsidies and tariffs.
Kamal Nath, India’s Commerce Minister, said he was optimistic the Doha Round, which had been frozen for seven months, “would not go round and round, but move toward conclusion.”
According to senior western envoys, the talks are expected to resume Wednesday in Geneva, less than 24 hours after President Bush is scheduled to ask Congress Tuesday for renewal of Trade Promotion Authority, which expires at the end of June.
“I think it is now more likely than not, though by no means certain, that we will reach a deal within the next few months.…There is a reignition of political energy and drive, and an increased recognition of the dire consequences of failure,” British Prime Minister Tony Blair told WEF participants in a keynote speech, shortly after the WTO meeting.
Peter Mandelson, EU trade Commissioner, said there is hundreds of billions of dollars of new trade riding on the Doha round, and cautioned there are systemic implications if the talks failed.
“The world will lose its insurance policy against the spread of protectionism. We will see a loss of confidence in the WTO system.…This is what makes an imperfect deal better than no deal,” he said.
Many fear the global negotiations could face severe delays and even a collapse if trade ministers cannot come up with a framework soon because of the TPA that is set to expire at the end of June. That authority allows the Bush administration to negotiate trade deals with the assurance that Congress will not amend them.
It is difficult to gauge whether Congress, now controlled by the Democrats, will grant an extension of the president’s trade authority, even if trade negotiators are able to reach a tentative framework before they begin debating an extension.
Apparel importers and retailers saw the announcement in Davos as a positive step, but were cautiously optimistic.
“That is encouraging news, but an agreement to negotiate is one thing and an agreement on substance is another,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “There is still a lot of disagreement to overcome but if there is a feeling in Congress that some progress is being made in Doha perhaps that will help move the debate on TPA.”
Stephen Lamar, executive vice president at the American Apparel & Footwear Association, said, “We want to see the trade talks gear up and conclude but restarting is only part of the battle. Finishing it up will be the issue.”
Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel, stressed that the news was a small step. “We need something concrete to keep Congress interested…People have got to see some real numbers [tariff cutting proposals] on the table and that all countries are contributing,” she said.
It is unclear what ramifications a successful Doha round could have on U.S. producers, who are pushing for special treatment in the talks for textile and apparel goods.
Previous negotiations in the WTO led to the elimination of quotas on apparel and textiles in 2005, which radically altered where goods are produced and, to a large extent, unleashed the manufacturing power of China.
— With contributions from Kristi Ellis and Evan Clark, Washington