Brazil and G20 Reach Impasse With US and EU in the WTO

World Trade Organization Secretary General Paul Lamy defended Thursday the decision to delay until early next year a global free trade agreement warning that "the risk of failure was too great".

If there’s insufficient convergence to reach the December Hong Kong meeting then "we must necessarily recalibrate our expectations; we must carefully reflect on what we want to achieve at and after Hong Kong, in order not to reduce the level of ambition of the whole Round," said Mr. Lamy in Geneva.

WTO members accepted this week, following simultaneous negotiations in London and Geneva that is was virtually impossible to reach a draft accord to reduce farm subsidies and lower tariffs in different sectors of the world economy on time for the coming Hong Kong mid December ministerial meeting.

The postponement was approved unanimously but Mr. Lamy pointed out it was important that ministers keep advancing for when the new date is agreed sometime at the beginning of 2006.

"We should try to capture as much as possible what has been achieved since July 2004, so that we have a package available for Hong Kong which is clearly a step forward compared to the July Framework, and also consider that whatever would be needed in terms of further concessions in order to achieve full modalities shortly after Hong Kong".

This week’s negotiations between United States, European Union, Japan, India and Brazil, who is the leader of the G20, were unable to advance in agriculture, industrial products and services, three crucial areas for any agreement.

EU is resisting further concessions in agriculture, and Brazil and India are reluctant to indicate their proposals regarding industry produce unless advances are recorded in market access for developing countries farmers.

"Reciprocity by some of our members in industrial tariffs and services is the crucial point of this negotiation", said EU Trade Commissar Peter Mandelson.

"There’s no time for another agriculture proposal before Hong Kong," he added.

The WTO Doha round timetable actually has until early 2007 when US President George Bush’s special powers to negotiate trade agreements expire.

"We all know we need to go to Hong Kong with a draft text for Ministers to sign and, that we have less and less time in which to develop the elements of this text," indicated Mr. Lamy adding that a way must be found "to move towards these elements, in full knowledge of our recalibrated ambitions and the need to capture the progress we have made, and we must do this by helping the Chairs take advantage of the bottom-up approach".

This article appeared originally in Mercopress – www.mercopress.com.

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