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‘Big divergences’ push WTO talks toward crisis


Reuters
First Posted 05:15:00 07/25/2008

Filed Under: International (Foreign)Trade, International Economic Institutions

GENEVA — Talks to salvage a global trade deal faced a crunch point on Thursday after three days of scant progress, as ministers went into another emergency meeting with developing giant India saying it had nothing new to offer.

Rich and poor nations remain at loggerheads as to who must make the next move. Officials said it would be clear on Thursday whether it was worth pursuing the long-delayed World Trade Organization talks.

"What I see is big divergences still. We'll see during the day if it is possible to bridge these gaps," Argentina's chief negotiator Nestor Stancanelli said as he arrived at WTO headquarters on the shores of Lake Geneva.

The United States and European Union say it is up to big emerging countries like India, China and Brazil to respond to their offers on opening up their agriculture markets.

But the emerging countries say Washington and Brussels are still not doing enough to help poor farmers in the Doha round of free trade talks which are supposed to promote development.

"The negotiations are locked but the key for unlocking them is in the hands of the emerging economies," Adolfo Urso, Italy's most senior trade official, told Reuters.

Ministers from seven key WTO members — Australia, Brazil, China, the European Union, India, Japan and the United States — were meeting counterparts from other countries on Thursday.

"Let's see what more we can do. I'm very clear what we cannot do. I cannot negotiate livelihood security of Indian farmers," Indian Commerce Minister Kamal Nath said earlier.

"There is nothing which I have in my pocket to give," he said, adding he wanted more cuts to a US farm subsidy ceiling.

US President George W. Bush and Indian Prime Minister Manmohan Singh discussed the need for trade powers to contribute to a breakthrough in the Doha talks, the White House said.

On Tuesday, the United States sought to get the talks moving by announcing it would slash its limit for trade-distorting farm subsidies to $15 billion. But Brazil immediately pointed out that was double current actual spending.

Nath had scant comfort for "high-cost" US and European businesses lobbying for a deal to stop developing nations carving out entire industrial sectors from market opening.

"In a globalizing world where competitiveness is at the heart of globalization, if you're non-competitive you can't seek refuge under an agreement of the WTO," Nath said. "The future is that cars are not going to be made in Stuttgart or Detroit—they're going to be made in Asia."

The Doha talks came under renewed attack from French President Nicolas Sarkozy, worried about cutting EU farm tariffs for little return. He said he could not sign a deal based on the current state of the negotiations.

Those comments drew a rebuke from EU partner Germany, the world's biggest exporter which has hoped a WTO would boost its famous car, chemical and other exporters.

"One comes away with the impression that France does not want to see a positive conclusion," said a German official. "There are different points of view between Germany and France. Germany is going to keep battling for a successful conclusion."

Business lobbyists expressed concern that a failure of the talks could encourage protectionist sentiment and block trade growth in a troubled world economy.

Japan's exports unexpectedly shrank in June for the first time in nearly five years, data showed on Thursday.

"From talking to negotiators, it is clear there's quite a lot of stuff in the back pocket—we need to find a way of teasing it out," said Gary Campkin, head of the international group of the British employers' federation CBI.

"It's frustrating for business to know ... the deal, if people put their minds to it, is doable," he said.

The talks were originally due to run until Saturday but delegates say they are likely to either flop before then because of the deep differences or drag on well into next week.



Copyright 2009 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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