WTO: trade deal progresses as developed countries cut subsidies and import tariffs

WTO optimistic for trade deal

World Trade Organisation (WTO) talks in Geneva will continue through to Wednesday after a last-minute compromise deal was brokered by Pascal Lamy, the WTO chief, in which the world's more developed countries would cut subsidies and imports tariffs... The proposed changes include EU and US farm subsidy cuts of up to 80 per cent. The compromise is that developing countries must open their markets to imports of manufactured goods, removing so-called "import shields"....India, which has pushed hard for a better deal for developing countries, said it was not satisfied with the proposals put forward before Saturday's negotiations....

Europe's trade negotiators were encouraged to press on with the deals by most EU countries, in a bid to rescue a world trade deal, but France, Italy and some others expressed concern about how the talks were shaping up. The Doha negotiations for a global trade deal were launched in 2001 with the aim of boosting the world economy and helping to fight poverty.  The chances of a long-elusive breakthrough were almost written off earlier this week given the deadlock in the talks, but they improved on Friday when new compromise proposals were welcomed by several key WTO players.

EU opposition

Without a breakthrough now, the talks risk being frozen for a further another two years while the United States and the European Commission change administrations and India holds elections.  A few EU countries, including current EU president France, opposed the proposals as a basis for further talks when Mandelson briefed the bloc, according to officials who attended the meeting. Mandelson negotiates trade deals for the 27-country EU, but individual countries have the power of veto over a final deal.

The British commissioner has come under attack from Nicolas Sarkozy, French president, for offering too much on agriculture and getting little in return on industrial goods, key to European exporters of cars, chemicals and textiles. Silvio Berlusconi, the Italian prime minister, said on Saturday he and Sarkozy had "deep concern" about the proposals and would remain in touch as the talks continue.  Adolfo Urso, Italy's senior trade official, said he wanted more market access for industrial goods than offered in Lamy's draft, and progress protecting place names associated with certain products, such as Champagne and Parma ham.  Ewa Bjorling, Sweden's trade minister, said his country would accept the package now on the table. Anne-Marie Idrac, the French trade secretary, said several EU countries were concerned the proposals were not balanced and needed to secure more access to markets in developing countries. Ireland also expressed disquiet.  Mary Coughlan, Ireland's deputy prime minister, said: "There is considerable disquiet and discontent [among EU countries] on a number of the specific aspects of it. "We have a couple of issues and one, of course, is agriculture. And we don't see the balance in Nama [trade in industrial goods], and we haven't seen services at all as of yet."

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Most EU ministers said "it would be very, very regrettable and a serious loss for the world if the Doha round were to fail."