WTO Head Says Trade Deal Still Possible by Year-End

A new global trade deal is still possible by the end of this year despite last month’s collapse of talks, said Pascal Lamy, the World Trade Organization’s director general on Tuesday.

Talks on a pact ended in July after the United States and India refused to compromise over a proposed “special safeguard mechanism”, which would enable developing countries to protect poor farmers by raising tariffs to counter a surge in subsidized imports.

Indian Commerce and Industry Minister Kamal Nath has already said the collapse should be treated as a pause rather than a breakdown and on Monday the WTO’s farm mediator called for negotiations to resume soon.

“The good news is that there may be still a possibility to move this forward, and conclude these negotiations within the time frame which all the WTO members had agreed since last year, that is end-2008,” Lamy said in the Indian capital.

Ministers from about 30 WTO members met in Geneva at the end of July seeking a breakthrough in talks in agriculture and industrial goods, the core areas of the WTO’s Doha round to open up world trade, launched in late 2001.

But the United States said India’s demand for an easily triggered safeguard to protect poor farmers would allow developing countries to hike tariffs above currently bound levels in response to normal trade growth, rather than a sudden surge of imports.

The Geneva meeting also exposed differences among developing countries, with exporters such as Uruguay and Costa Rica concerned that they could lose markets in their vital South-South trade.

Brazil and Australia — both big food exporters — have since called on other WTO members not to abandon the negotiations.

Lamy is visiting Delhi this week and Washington next to get a sense of whether the talks can be resumed.

(Writing by Mark Williams; Editing by David Fox)