New world trade chief facing 'tough challenge'

Pascal Lamy stepped into office as the new head of the World Trade Organisation, pledging to re-energise negotiations ahead of the crucial global trade summit in Hong Kong just three months away.

But while nearly 150 countries agreed Lamy was the best person to lead the organisation, key negotiators are saying even he may not be able to overcome the stalemate that has stalled talks over a new global pact.

“There’s a lot of work ahead of us following both what happened and what did not happen,” Lamy said at WTO headquarters. “Hong Kong, obviously, is and remains priority No. 1.”

Both Lamy and negotiators agreed that talks would have to pick up steam, citing a July meeting in Geneva where negotiators missed a deadline for reaching a framework deal.

Ministers hope that in December in Hong Kong they can hammer out a new global trade pact that will slash subsidies and reduce tariffs, with emphasis on freeing up agricultural markets for poorer countries.

Many key players have expressed concerns about prospects for Hong Kong after the July failure left little time for Lamy and the organisation’s 148 members to broker a comprehensive draft by the end of the year.

“I think we have to lower expectations because the talks have lagged,” U.S. Trade Representative Rob Portman said.

“We have not made the progress over the last year or so that all of us hoped for. There are lots of reasons for that. We have an ambitious agenda, and these are tough issues.”

Portman said that the end of 2006 remained the key deadline for concluding negotiations, and said he was “optimistic” that Lamy could re-energise the talks.

“He brings expertise and the skills that are needed to pull together the major economies like the United States and the EU, and also developing countries, into a consensus,” Portman said.

The so-called “Doha Round” of global trade talks, named after the Qatari capital where they were launched in 2001, is already well behind an original December 2004 deadline. The round is supposed to address the concerns of developing countries.

Other key negotiators also said Lamy faces a major challenge if he hopes to produce a breakthrough in Hong Kong.

“It’s quite a tall order,” Brazil’s WTO ambassador, Luiz Felipe de Seixas Correa said.

“The expectations that we all had for this year were predicated on some progress to have been achieved by July, and we haven’t done that.”

Seixas Correa and Portman agreed that agriculture negotiations remained the most sensitive issue. Progress has been slow this year in talks between rich countries determined to protect and support their farm industries, and poorer countries seeking greater market access.

A 2003 conference in Cancun, Mexico, that was meant to further talks, collapsed largely due to differences on agricultural policy.

Lamy, a French Socialist, was chosen to succeed Thailand’s Supachai Panitchpakdi, having convinced both developed and developing countries that he was the man to prod countries toward compromise and break the impasse.

Lamy, who was criticised in his own country during his five years as Brussels’ top trade negotiator for giving away too many concessions on farm trade, has pledged to “ensure that trade opening continues to contribute to development, and that we place the interests of developing countries at the centre of the world trading system.”

Reaching agreement in Hong Kong “is not impossible, but lots of things would have to change in order to achieve that,” said Seixas Correa, one of three developing country candidates defeated by Lamy in the two-month race to replace Supachai as WTO leader.

“We would have to be working almost on a 24-hour basis starting in September.”

Portman said it was “unknown” what Hong Kong would produce, but noted that negotiations have improved recently “because we have this sense of urgency, this sense that we are in trouble.”

Fabian Delcros, a spokesman for the EU’s mission to the WTO, said it was up to WTO members to make compromises.

“We need to be realistic on how much the director general can contribute,” Delcros said.