ANALYSIS-Behind the rhetoric, WTO looks to trade deal

18/06/2015 10:20 - 2102 total view

GENEVA, May 29 (Reuters) - A torrent of anger and disappointment from governments, business lobbies and farmers followed recent new proposals from the World Trade Organisation for a deal to end protracted trade talks. But seasoned diplomats caution that the rhetoric should be taken with a pinch of salt and say the revised texts have helped put agreement in the WTO's long-running Doha round within sight. "The more pleased you are, the less pleased you must sound," said one major developed country diplomat. That is not too say that Doha, now in its seventh year, does not face massive hurdles before a deal to open up global trade, boost confidence in the world economy and help developing countries increase exports can be brought home. The chances of a successful deal this year are 60 percent, WTO Director-General Pascal Lamy told the European Parliament on Thursday. But nine months of intensive negotiations on agriculture -- the key to a successful round -- have whittled away many of the differences in farm trade. And in industrial goods, the other core chapter, where Canada's WTO ambassador Don Stephenson who chairs the talks has bemoaned a lack of real negotiation, diplomats say WTO members are at last starting to engage seriously. Revised negotiating texts last week in agriculture and industry, and reports this week on talks in services and trade rules, are intended to serve as a blueprint for a meeting of ministers that could occur in the next few weeks. That meeting will take the tough political decisions on cuts in farm and industry subsidies and tariffs that would open the way for a comprehensive trade deal, which the WTO's 152 members say they want by the end of this year. But before ministers can meet, negotiators need to tidy away a whole range of complicated technical issues. "It's more optimistic than it was," said a senior diplomat from a key developing country. "People think you could bring these papers to ministers, which wasn't the case before." BALANCE AND AMBITION The talks are still hung up on differences between rich and poor countries over how much a deal should open up markets to new trade while protecting farmers and fledgling industries in developing countries from the full force of competition. The United States and European Union say a deal will only make sense if big developing countries such as Brazil, India and South Africa open up their markets for manufactured goods to both rich-country businesses and other developing nations. But developing countries say a Doha agreement must be balanced between agriculture and industry. If rich countries want to protect their farmers by seeking waivers to proposed cuts in agricultural tariffs, then poor countries will scale back the size of industrial opening. In the latest clash on Wednesday, Washington and Brussels sounded the alarm over new industry proposals that they fear would allow developing countries to carve out entire sectors from tariff cuts. Talks on liberalising markets in services such as banking, telecoms and health also appear deadlocked, with no new offers tabled since late 2005. In agriculture, many expressed reservations about the new proposals by New Zealand's WTO ambassador Crawford Falconer, who chairs the farm talks. But the G-20, one of the main developing country coalitions, led by Brazil and India, was upbeat. "We now have a clearer picture of possible landing zones," it said in a statement. "The G-20 regards your text as a good basis to build on." Even issues which appear completely intractable are amenable to a solution, trade experts say. For instance the United States insists a new agreement on unfairly priced imports should recognise Washington's controversial "zeroing" method for calculating anti-dumping duties. Every other WTO member wants it formally banned. "There's a price for everything," said one senior trade official. For instance many countries are keen to impose limits on the duration of anti-dumping measures while Washington wants them to be renewable, subject to review. A good example of the impact of negotiating stances came from the European Union on Tuesday in its reaction to the new industrial goods proposals. "The risk we see in the current text is that of absolutely no new market access," EU trade director-general David O'Sullivan told WTO members, according to a participant in the meeting. Meanwhile EU trade chief Peter Mandelson, addressing the European Parliament, had a slightly different message, as he spoke with an eye to European businesses and trade unions. "Within the ranges provided by the text the EU can secure some new market access in key markets in China, Asia and Latin America," Mandelson said.