Little Progress in WTO Industry Talks

By Jonahthan Lynn | June 12, 2008

Talks on industrial goods, a crucial element in negotiations for a new trade deal, are failing to overcome deep differences between rich and poor countries, diplomats and officials said Wednesday.

But, they said, parallel negotiations on agriculture are making progress in narrowing remaining complex issues.

Around a dozen countries launched talks Monday on cutting industrial tariffs, after ministers in Paris last week called on senior officials to “engage intensively” to break the deadlock.

The industrial goods talks, hosted by the United States and including key players such as the European Union, Japan, Brazil, India and China, come at a critical juncture for the World Trade Organization’s (WTO) Doha round to free up world trade. [IJ Ed. Note: Any future progress in opening markets for financial services, including insurance, depends on a successful outcome in the industrial and agricultural sectors].

The round, now in its seventh year, has stumbled from missed deadline to missed deadline. WTO members now say they want to complete it by the end of this year, before a new U.S. administration takes office.

WTO Director-General Pascal Lamy will convene a meeting of representative delegations Friday to hear how the industrial goods talks are going, diplomats and officials said.

“It’s just an update and to move back the ministerial to July,” said the ambassador of one middle-ranking developing country not directly involved in the industrial goods talks.”They’ll never say but it will be the last week,” he added.

The industrial goods talks remain stuck on the some of the issues that have bedeviled them from the start, involving the scope of waivers to tariff cuts for developing countries.

Developed countries want to make sure these do not allow developing countries to shield an entire sector such as automobiles from market opening.

Rich countries are also resisting proposals to give special treatment to customs unions, as the United States fears this would allow Brazil and Argentina, the leading members of the Latin American bloc Mercosur, to protect much of their industry.

Meanwhile some developing countries are objecting to this week’s talks under U.S. auspices, saying they do not have a proper mandate to negotiate, officials said.

Argentine and Indian trade officials met in Buenos Aires this week, agreeing that a balance must be struck on market access for both agricultural and non-agricultural goods, according to a statement by the Argentine Foreign Ministry.

“Both parties emphasized that the current draft text of NAMA (non-agricultural market access) does not reflect this balance since it demands that developing countries … make greater (tariff) cuts than those offered by developed countries, which is totally unacceptable,” it said.

Argentina is Latin America’s third-biggest economy and a major world supplier of corn, soy, wheat and beef.

FARM TALKS
The format of small-scale consultations among key players has enabled the agriculture talks to crack intractable issues.

Those small group meetings continue, prompting New Zealand’s WTO ambassador Crawford Falconer, who chairs the agriculture talks, to say he would not hold broader negotiations this week. That could also delay a ministerial meeting.

Falconer said he understood the small-group consultations would continue into next week. “I must say that those discussions I am involved in demonstrate a genuine engagement on the part of members to think creatively about how to deal with our remaining ‘hot spots’,” he wrote to WTO delegates.

Among subjects under discussion are special treatment for imports of tropical products into rich northern countries, typically from Latin America, and preferential treatment for farm imports from developing countries, such as those from former European colonies into the European Union.

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