"We're worried about the direction it's taking," Steve Collins, president of the Automotive Trade Policy Council, which represents General Motors Corp, Ford Motor Co and Chrysler LCC, said in an interview. "We wish our negotiators the best, but we are worried," he said.

The automakers' anxiety is matched by concerns in the U.S. textile and steel industry as world trade negotiators prepare to take what many believe is a high-stakes gamble to bring the nearly seven-year-old trade round to a successful close.

U.S. Trade Representative Susan Schwab and top trade officials from Europe, India, Brazil and other leading World Trade Organization members will gather in Geneva the week of July 20 to try to strike a deal.

If they fail, it could be the death blow for the long struggling round or at least knock it out for years.

The United States, which has a 2.5 percent tariff on passenger cars and a 25 percent duty on light trucks, imported $245.8 billion of autos and auto parts last year but exported only about half that amount, or $124.3 billion.

On Tuesday, Ford reported its U.S. sales fell 28 percent in June on an unadjusted basis, driven by steep declines in the sales of trucks and SUVs under rising gasoline prices.

"It's a tough time for automakers," both in the United States and overseas, White House spokesman Tony Fratto told reporters on Air Force One en route to an event with President George W. Bush in Mississippi.

BIG DEVELOPING COUNTRIES

Collins said he feared the Bush administration could agree to a Doha deal that slashes remaining auto tariffs in the United States and other developed country markets, while letting big developing countries like India, Brazil and China exempt their own auto sectors from tariff cuts.

U.S. automakers are also disappointed that WTO negotiations on reducing foreign tax and regulatory barriers to U.S. auto exports "have gone nowhere," Collins said.

Washington is pressing hard in the Doha talks for new agricultural, manufacturing and services trade opportunities and phasing out remaining U.S. auto tariffs could be "the price" it pays for that, Collins said.

U.S. textile producers also are worried they could end up on "the chopping block," said Cass Johnson, president of the National Council of Textile Organizations.

Current proposals would cut average U.S. textile tariffs "from around 15 percent to around 4 percent. That would be just devastating for us," Johnson said.

U.S. steelworkers and many small to medium-sized manufacturers fear an agreement could weaken the United States' ability to impose anti-dumping or countervailing duties on imports it believes are unfairly priced, said Scott Paul, executive director of the Alliance for American Manufacturing.

"Every successful round of WTO negotiations has further weakened US trade remedy laws and we know, based on the submission of many trading partners, that there is a strong desire to further scale those back," Paul said.

Meanwhile, current tariff-cutting proposals offer little chance of increased U.S. exports, Paul said.

Doug Goudie, director of international trade policy at the National Association of Manufacturers, said a deal was possible only if major developing countries like Brazil, China, India and Argentina agree to open their markets more.

"If developing countries show some flexibility ... they're going to see some rewards come to them. The United States has been perfectly clear about that," Goudie said.

"There are sectors that are going to be hit harder than others. I think textiles, maybe autos ... but overall this is going to be a great round as long as we get a good deal" that expands U.S. exports, Goudie said.

(Editing by Vicki Allen)

Reuters, Tuesday July 1 2008

By Doug Palmer

Source: www.guardian.co.uk