Business Groups Press Emerging Economies over Doha

By Juliane von Reppert-Bismarck | July 22, 2010

Brazil, China and India must use their growing economic might to help revive deadlocked global trade talks, a coalition of business lobby groups said in a letter to U.S. and European Union trade negotiators.

The letter, sent on Wednesday, is the latest sign that interest is growing in completing the Doha round of talks, which was launched in 2001 to help poor countries prosper through trade, but has been stalled since 2008.

The business groups, from Europe or the United States, said the Doha round would progress only if Europe and the United States convince the big emerging economies to reduce tariffs on important industrial sectors and services.

“The success of the Doha Round depends on the willingness of the large emerging countries — especially Brazil, China and India — to assume the responsibility commensurate with the economic benefits they have been realizing as a result of global trade and investment liberalization,” the groups said.

The letter was sent by Business Europe, the Business Roundtable, the Coalition of Service Industries, the European Services Forum, the National Association of Manufacturers and the U.S. Chamber of Commerce.

It urged U.S. Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht to engage the emerging powers and “move forward aggressively to help break the impasse.”

“It is essential for the large emerging economies to participate in negotiations on key industrial sectors,” it said.

“On services [which includes insurance], what is on the table falls far short of providing the substantial and meaningful improvements in market access, especially by the large emerging economies, that are needed to create the new business opportunities essential for economic growth, development and job creation.”

SHIFTING POWER
The letter highlights the shifting power in the World Trade Organization, which has traditionally been dominated by established economies such as the United States and the EU.

The reticence of China, India and Brazil to open their markets to foreign goods and services has been largely blamed by other countries for the stalemate at the talks.

A delegation of industry executives representing Fedex, Qualcomm and Caterpillar and other companies travelled last week to Brussels and Geneva to urge trade negotiators to speed up talks, but said they received a cool reception from China’s WTO negotiator.

Wednesday’s letter said proposals being discussed at the WTO had abandoned the Doha round’s initial ambitions and “fail in their current form and substance to significantly support economic growth and development.”

Negotiators must also work to tear down non-tariff barriers such as industrial standards and customs codes, and emerging economies should be reminded that they will be the main beneficiaries of free trade, it said.

The EU’s De Gucht echoed that argument on Thursday during a visit of the World Expo in Shanghai, noting China’s growing stake in European finance and industry.

(Editing by Mark Heinrich)

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