U.S. News

WTO Powers Fail to Make a Breakthrough in Trade Talks

Associated Press

The United States, Europe and other major powers have made only a vague commitment to liberalize global trade, despite encouragement from leaders attending the World Economic Forum.

The nearly 30 countries that met on the sidelines of the forum Saturday to discuss the lack of progress in the World Trade Organization talks "expressed a strong wish for a quick resumption" of negotiations, but stopped short of making improved offers to break a deadlock that has lasted for six months.

British Prime Minister Tony Blair told the forum later that he and other leaders were cautiously optimistic a trade breakthrough would still come.

"I think it is now more likely than not, though by no means certain, that we will reach a deal within the next few months," Blair said. "There is a re-ignition of political energy and drive, and an increased recognition of the dire consequences of failure."

Blair said he also saw prospects for progress in combating global warming because of a "quantum shift" in U.S. opinion, citing U.S. President George W. Bush's State of the Union address and steps by states like California to reduce emissions.

But he said China and India also must commit to controlling emissions of greenhouse gases.

If Britain stopped emissions entirely by shutting down the country, the growth in China's use of fossil fuels would make up the difference in just two years, he said.

The WTO meeting in the Swiss Alps was the first joint attempt by trade and foreign ministers at reviving the talks since efforts to clear barriers to trade in farm goods and manufactured products acrimoniously collapsed last summer.

The U.S. and the EU publicly blamed each other for the failure and both clashed with leading developing countries India and Brazil over slashing subsidies and cutting tariffs, particularly in the agricultural sector.

"There will need to be a new U.S. offer on farm subsidies. There will need to be a new EU offer on tariffs. There will need to be a new offer from India and Brazil on manufactured goods," WTO Director-General Pascal Lamy said.

Lamy said the negotiations have clearly changed in character since the pessimism of last July, but he could not predict when negotiators might be ready to take up again the hard numbers of a new trade deal.

"We are not going to hammer out a deal, but we do have a responsibility to move things forward," EU Trade Commissioner Peter Mandelson told fellow negotiators during the meeting.

Blair and Brazilian President Luiz Inacio Lula da Silva sounded confident about progress Friday, a day after 65 of the most powerful business executives warned that failure to reach a new trade deal would undermine the world's economic growth and risk the dangers of protectionism.

But while pledges of commitment have never lacked, getting countries to open up their markets to foreign competition has been much more difficult since the round's inception in Qatar's capital five years ago.

Summits in Cancun, Mexico, in 2003 and in Hong Kong just over a year ago both failed to outline concrete steps for liberalizing the global economy and were more noteworthy for the public bickering among ministers and the angry street protests they sparked.

Although talks were never formally or legally suspended, Lamy has said that he will only "officially restart" the round when countries signal their readiness to make concessions.

The positive note he has sounded in recent weeks had raised speculation that he might make the announcement Saturday, but even that would have been little more than symbolic and meant primarily to kick-start a final push for a deal.