Bridges Weekly Trade News Digest • Volume 12 • Number 29 • 10th September 2008

Trade Talks Resume among Limited Players

Discuss this articleShare your views with other visitors, and read what they have to say

Senior trade officials from seven economic powers are meeting in Geneva this week for the first time since world trade talks collapsed at the end of July.

Sources indicate that a primary focus of their discussions will be the the Special Safeguard Mechanism (SSM), a tool that would allow developing countries to raise tariffs temporarily when import volumes increase or prices fall suddenly. Deadlock on the SSM was at least the proximate trigger of the breakdown in the negotiations six weeks ago.

The meetings this week will include representatives from to so-called G-7 — Australia, Brazil, China, the EU, India, Japan and the US — the same players that were at the centre of talks in July. In addition to the SSM, tariff rate quota creation and tariff simplification were also on the agenda for the talks, a source said.

A source close to the negotiations told Bridges that the US, the host of the talks, rejected a request from China that Indonesia, the coordinator of the G-33 group of developing countries and a key player in the contentious SSM debate, be allowed to participate in the meeting.

“The G-7 process is exclusive,” a developing country trade official told Bridges, emphasising that the negotiations should be made more inclusive and brought back to the WTO if any real results are to be achieved. “I am sceptical about what will come out of the meeting,” he said, indicating that he thought the gathering was only meant to achieve political ends. “The credibility of the process is in question.”

Critics of the closed-door negotiation process also pointed to the absence of four cotton-producing African nations - Benin, Burkina Faso, Chad and Mali - from the talks. The C4, as they are known, are the primary players, along with the US, in negotiations on potential cuts in US cotton subsidies, a topic that was never broached at the July meetings and that remains a key stumbling block to progress toward a world trade deal.

But what will ultimately emerge from the meetings is, at this point, anyone’s guess.

“People are waiting to see what comes out of this process of the G-7,” WTO spokesman Keith Rockwell said, Reuters reported. “Nobody is rushing into anything. People are examining the situation and trying to find ways forward.”

But despite the resumption of talks, many have expressed scepticism over the potential for significant progress.

“Support for the…deal as a whole is very fragile and not just a question of the US and India resolving their differences in agriculture,” EU Trade Commissioner Peter Mandelson said in a speech to the European Parliament on 3 September.

“I feel as if we have a priceless, wafer-thin vase of great craftsmanship in our hands but which now has to be carried from here over a very slippery floor,” he said.

Things may be especially dicey for Mandelson, who is still trying to manage differences among EU member states over how hard to push for a world trade deal.

Indeed, as Agence France-Presse reported last week, French Prime Minister Francois Fillon says his country, which currently holds the EU presidency, will not agree to a deal that compromises French or European interests.

“We must not drop our guard,” Fillon said during at recent agricultural event in western France. “The determination of some to obtain an agreement at all cost is intact. You can count on the president and the government not to harm the interests of France and Europe. For us too, our determination is intact,” he said.

WTO Director-General Pascal Lamy said last week that he was “neither a pessimist nor an optimist” on the prospects for a successful resolution of the talks, AFP reported.

“There’s nothing shocking about a round that lasts seven or eight years,” he went on. “Especially if you consider the rounds in the 1960s and 1970s, when there were only four countries at the table and three subjects to deal with. Today, you have 153 Member countries and a score of items on the agenda.”

ICTSD reporting. “Trade officials consider resuming Doha Round talks,” REUTERS, 9 September 2008; “OMC: Lamy annonce une reprise des négociations au niveau technique,” AFP, 4 September 2008; “France digs in heels ahead of WTO,” AFP, 9 September 2008.