December 1, 2009 / 3:19 PM / in 8 years

Major economies square off over global trade deal

GENEVA (Reuters) - The United States sparred with the world’s large emerging economies on Tuesday over the fate of a long-delayed deal to open global trade that critics say has become largely irrelevant in light of the financial crisis.

<p>A farm worker reaps tobacco leaves on a farm on the outskirts of the capital Harare in Zimbabwe February 21, 2006. REUTERS/Howard Burditt</p>

After Brazil’s foreign minister, Celso Amorim, told a World Trade Organisation ministerial that developing countries would offer no more to clinch a Doha Round deal, U.S. Trade Representative Ron Kirk called on all the WTO’s 153 members to get “out of their comfort zones”.

“If you take Mr Amorim’s rationale then we are basically dooming Doha to failure because everybody’s saying we want change but we don’t want to do anything different,” he said.

On the second day of a three-day meeting, Kirk stressed to reporters that while Washington was not seeking further concessions from the world’s poorest countries, emerging powers needed to open markets more to make the new global pact worthwhile.

Countries seeking more sway in the governance of the global economy, among them Brazil, China and India, needed to show more leadership in the Doha talks to edge the agreement toward conclusion next year, the U.S. trade chief said.

Others questioned whether that 2010 goal could be met.

“The issues that are stopping its conclusion are issues of substance, of content,” South African Trade Minister Rob Davies told Reuters.

While developed economies are seeking new markets for their exports, poorer nations smarting from the recession are looking for the development boost first promised to them when the Doha Round was launched in Qatar in 2001.

“It is far from certain that there will be a conclusion next year,” Davies said, signalling his country was willing to wait longer if necessary for a development-oriented agreement.

PROFOUND ECONOMIC CHANGES

China’s commerce minister, Chen Deming, told Reuters in an interview that it would be wrong to reopen what had already been agreed in the Doha talks to date -- an apparent reference to the U.S. call for a new negotiating approach.

“How can we turn a development round into a round where the interests of some major developed members are reflected whereas the interests of the developing members are not?” he asked.

Chen said a deal could boost the fragile world economy by $500 billion. The Washington-based International Food Policy Research Institute, which estimated potential gains at a smaller $70 billion, said the Doha accord stood to have little impact on the current ills of the global economy.

“World trade and the world economy have changed profoundly since 2001,” it said in a study launched on the sidelines of the meeting, noting that commodity market strains and environmental pressures were not factored into the original Doha agenda.

But Carlo Trojan, a former EU ambassador to the WTO, said the financial crisis and other emerging challenges made it even more important to wrap up a Doha deal quickly.

“We have to conclude the negotiations on yesterday’s problems first to be able to address the problems of tomorrow,” he told a Geneva symposium on the fringes of the ministerial.

Several officials said the least controversial parts of Doha should be voluntarily enacted before the full deal -- which needs full consensus across all areas -- is clinched.

Britain’s minister for trade and development, Gareth Thomas, said that countries should start cutting import duties on “green goods” at once in order to encourage business in environmentally friendly technology.

“Why hold back now, just because we are waiting for the Doha Round to be done?” he told Reuters.

And South Africa’s Davies said the same principle should apply to other corners of the Doha agenda, calling specifically for an “early harvest” of cuts to U.S. cotton subsidies that make it impossible for African producers to compete.

“That would be fair and just,” he said. “The situation of cotton farmers in West Africa is desperate, that is the reality, and it has only gotten worse with the onset of the crisis.”

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