World Trade talks hanging in balance

Efforts to liberalise world trade are stalling because of EU intransigence over reforming its farm aid, ministers said today as they wrapped up a fruitless week of meetings in Geneva.

The deadlock over agricultural tariffs and subsidies threatens to derail the current round of global trade talks, which aim to boost the world’s economy by lowering trade barriers.

The World Trade Organisation’s 148 members are trying to agree on an outline deal by the end of the year, but time is running out.

“The responsibility at this point lies squarely with the EU,” said US Trade Representative Rob Portman. “I do believe that the promise of Doha hangs in the balance.”

The so-called Doha round of trade talks – named for the Qatari capital where it was launched in 2001 – is supposed to address the needs of developing countries, for whom agriculture is a particularly sensitive topic.

They want the European Union, US and other rich countries to make substantial cuts in aid to farmers, which they say keep world prices artificially low and undermine their exports.

“This moment is crucial not only for trade,” said Brazilian Foreign Minister Celso Amorim. “Trade is important for world stability as a whole.”

European farm subsidies and tariffs have become the focus of the talks that are building to the December meeting in Hong Kong after the US put forward an improved proposal to cut its own agricultural support programs last week.

But for European trade chief Peter Mandelson the pressure also is coming from within the EU, as France withdrew its support for his proposals on cutting agricultural trade barriers.

Mandelson, however, said other countries had to make concessions and that more progress was needed in removing trade barriers for manufactured goods and services – the bulk of global commerce.

“This is not an agriculture-only round, and the European Union is not its sole banker,” he said.

Mandelson said Brussels was still gauging its reaction to the US proposal and denied that the EU was stalling the negotiations.

“We will take no lectures from anyone on the needs of developing countries,” Mandelson said. “We have more developing country agricultural produce coming into our market than the whole of the US, Canada, Japan and Australia combined.”

But a number of ministers were pointing the finger at Brussels, saying they were greatly disappointed by the EU’s lack of movement in negotiations this week.

“The EU are the ones putting the development round under threat, and developing countries will suffer most,” said Australia’s Trade Minister Mark Vaile.

Portman also criticised the EU’s immobility, saying “time is too short for us to have wasted weeks.”

“There was not only a lack of a proposal but a seeming lack of urgency, despite the fact that we’re facing this deadline in Hong Kong,” he said.

Trade ministers said they expected the EU to put forward a new proposal on import tariffs next week, but Mandelson declined to comment on Brussels’ plans.

It has become a two-front battle for Mandelson, who has also had to contend with France, where agriculture reforms are viewed with great suspicion by farmers long accustomed to EU handouts and guaranteed minimum prices for their produce.

Yesterday, French Trade Minister Christine Lagarde said that the European Commission had been unable to show “any clear proof” that Mandelson was still within its negotiating mandate.

“As things stand, France therefore cannot support the commission in the agriculture proposals it has made,” Lagarde said.

But Mandelson dismissed that criticism and pointed out that EU member states had already given him their support this week.

Portman urged Mandelson not to let France and others derail the negotiations.

“A few countries in Europe are unwilling to be reasonable,” he said. “We all face domestic pressure, all of us. And we have to stand up to it.”

The international aid agency Oxfam said failure to make concessions could deliver the death blow to the talks, which are already well behind an original December 2004 date for completion.

“Promises have been made repeatedly by rich countries to remove barriers to farm trade,” said Celine Charveriat of Oxfam.

“But this rearguard action by the French and other EU member states is undermining even the minimal progress made.”

It was unclear if ministers would reconvene in Geneva or another location next week.

“We’re all waiting for the Europeans,” said Brazil’s Amorim.

“I have the expectation they will come with something better. How much better I don’t know.”