WTO talks sour as emerging economies split

28th July 2008, Comments 0 comments

Emerging nations’ split on Sunday is threatening to shatter an emerging fragile global trade pact.

28 July 2008

GENEVA - Squabbles among emerging economies threatened on Sunday to shatter fragile gains in the fraught quest for a new global trade pact, as negotiators slogged on into a second week of talks.

Top delegates said much remained unresolved after a meeting here late Sunday that sought to cement a tentative breakthrough on farming and industrial products.

US Trade Representative Susan Schwab accused emerging economies of delaying an agreement.

"We had a path on Friday for a successful outcome on Friday night. It wasn't perfect, but it was delicately balanced and had a strong endorsement," she told reporters after the talks.

"Unfortunately a few emerging markets have decided that somehow they want to rebalance it in favour of one or another issue," she said.

"That was a very delicate balance that was struck. You pull one thread, it threatens to unravel."

Ministers from over 35 key trading nations were due to consult all 153 members of the World Trade Organisation at a full meeting on Monday.

They have been meeting at the WTO for a week, discussing cuts in subsidies and import tariffs with the aim of forging a new deal under the so-called Doha Round of trade talks.

Optimism had grown after a perceived breakthrough Friday in deadlocked talks on farming and industrial products, followed by further encouraging signs from key players after discussions on the services sector.

But as negotiators began picking through the finer details on Sunday, a split opened up among emerging nations, underlining the vast differences in their interests.

India stuck to its hard line of protecting its small-scale farmers, claiming that it had rallied 100 countries to its cause, but other developing economies said they opposed India's stance on the issue.

Indian Commerce Minister Kamal Nath told reporters Sunday night's meeting was "constructive" but said there was still disagreement on the persistent sore points of agricultural import tariffs and sector-specific proposals for industrial goods.

Nath claimed that India's concerns on agricultural tariffs were widely shared.

"There are 100 countries who have made a paper expressing their concerns" on the so-called special safeguard mechanism (SSM) which would allow developing countries to raise farm tariffs if imports surge, Nath told reporters.

But an African diplomat told AFP: "Who are these 100 countries? They(India) are thriving on a pack of lies."

Other unresolved issues including trade in cotton added to tensions. WTO spokesman Keith Rockwell told reporters after Sunday's meeting that SSMs and cotton were among the hot issues going into Monday's talks.

Under proposals tabled by WTO Director-General Pascal Lamy, developing countries could use the SSM to protect their farming sector by increasing tariffs on foreign goods if imports surge over 40 percent.

An Indian diplomat told AFP on Saturday this threshold was too high. "By the time it reaches 40 percent, our people would have died," the diplomat said.

The African diplomat meanwhile said his country wants the safeguard to take effect at a higher rate.

Other developing countries which oppose India's stance include Latin American economies such as Paraguay and Uruguay, much of whose farm exports go to developing states.

"We are not ready to accept a solution that will impose a different balance of rights and obligations than the one we agreed upon in the Uruguay Round" of talks in 1994, said Uruguay's ambassador to the WTO, Guillermo Valles Galmes.

"If others are ready to accept that, we are not," he told reporters.

Meanwhile, Asian export giant China annoyed other developing countries as it insisted on protecting its rice, cotton and sugar producers, another diplomat told AFP.

"China is becoming a major problem. It is going back on a lot of its promises," said the diplomat on condition of anonymity, adding that the Asian exporter said it would not lower its tariffs on these three products.

Sources said the talks - which had been scheduled to wrap up by Saturday - were likely to carry on until at least Monday or Tuesday.

Anything approved by the 35 key countries meeting here would still have to be cleared by all 153 WTO member states.

[AFP / Expatica]

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