Bronwen Maddox
'We are on a knife edge – we have to engage Bush'
Mon Jan 8, 2007 02:54

 
January 08, 2007

'We are on a knife edge – we have to engage Bush'
Bronwen Maddox, David Charter in Brussels and Tom Baldwin in Washington


Peter Mandelson says that a global trade deal is doomed unless the American President backs it today
Global trade talks that are intended to improve the lives of billions of poor people stand on the brink of failure, Peter Mandelson, the European Trade Commissioner, has told The Times.

At a meeting today, Mr Bush can either breathe new life into trade negotiations that were suspended last July because of international disagreement over cutting tariffs and farm subsidies, or he can effectively kill the five-year process, said Mr Mandelson.

The financial consequences of failing to liberalise World Trade Organisation rules through the so-called Doha Round of talks will be huge, with the World Bank estimating that a deal could generate an extra $287 billion (£150 billion) by 2015.

The political impact could be even greater. The talks, that were convened in Doha two months after 9/11, are sometimes known as the Development Round to emphasise the goal of helping the world’s poorest people to escape poverty and also to remove a key motivation for terrorism.

“We are on a knife-edge,” Mr Mandelson said, before his meetings today with President Bush and Susan Schwab, the US Trade Representative. “We have to engage President Bush personally, because this deal can only be done with his authority.” Mr Mandelson will meet Mr Bush alongside José Manuel Barroso, the European Commission President.

They will call for the US to cut its maximum annual spend on farm subsidies from $23 billion to $15 billion. In return, they will offer a further reduction in EU trade tariffs.

Mr Bush has repeatedly stated his commitment to the Doha Round, but Mr Mandelson emphasised that the President had a very tight timetable to prove that he is serious about re-engaging with the talks. In March Congress will settle subsidy levels for US farmers and set a figure that could signal the end of meaningful multilateral dialogue.

Mr Bush’s own “fast-track” mandate from Congress to negotiate runs out at the end of June and Pascal Lamy, the World Trade Organisation chief, has already said that he will need to ask for an extension.

Mr Mandelson’s team is hoping for a commitment on extending the mandate in Washington this week, along with a sign from the White House that it is prepared to support cuts in farm subsidies.

Otherwise, Mr Mandelson said, “it means putting Doha on ice until at least a year into the next president’s term, so we would be talking about a delay of three to four years from now. Even reviving it then would not be a quick or easy thing to do because the confidence of developing countries in the multilateral system would be greatly damaged.”

Officials close to Mr Mandelson are even more apocalyptic. “We see this as our last big shot at trying to get the Americans to do something on the Doha Round,” one said.

The EU has offered to cut agricultural subsidies by two thirds but Mr Bush, under heavy presssure from the American farming lobby, is reluctant to make the reductions that are demanded by Mr Mandelson unless there are tariff changes that would improve market access for the US in Europe and other parts of the world.

European negotiators admit that the EU agricultural tariffs are high but have said that they are prepared to go beyond the reduction of 29 per cent that is proposed. This would be “close to but not all the way to” the 54 per cent reduction that is demanded by the G20 developing nations, that include Brazil and India. The US wants a 64 per cent cut in EU tariffs.

Mr Mandelson rejected the suggestion that the Democratic control of Congress spelled the end for multilateral trade deals.

Mr Mandelson, who is expected to meet the congressional leadership, said: “Democrats want the US to re-engage with the world. And they want to be re-elected in 2008. They won’t do that if they get a reputation for being anti-business and anti-free-trade.”

Fairer future

# The Doha round of trade talks started in November 2001 in the Qatar capital

# Its main aim is to make trade rules fairer for developing nations

# World Bank says a deal could increase world income by $287 billion by 2015

# The talks collapsed in Cancún; the main sticking point was farm subsidies

# They got back on track in Geneva in 2004

# In 2005 in Hong Kong, a plan to end farm export subsidies by 2013 was agreed by most countries

# In Geneva last year the Doha round was suspended after a failure to agree a final deal on cutting farm subsidies and import tariffs

# The last round of talks (the Uruguay round) took eight years to reach a deal

# President Bush’s “fast-track” mandate to negotiate ends on June 30

http://www.timesonline.co.uk/article/0,,3-2536621,00.html
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  • REMOVING BUSHMike Macaulay, Mon Jan 8 09:24
  • 'We are on a knife edge – we have to engage Bush' — Bronwen Maddox, Mon Jan 8 02:54

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