26th Sep 2020

EU and US pledge to salvage world trade talks

The EU and the US reaffirmed their commitment to on-going world trade liberalisation talks at a bilateral summit in Austria on Wednesday (21 June), but key questions remain unresolved.

"The point is we are committed to a successful round and it is going to take hard work," US President George W. Bush told a news conference after the one-day meeting. "We can't let this round fail."

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EU commission president Jose Manuel Barroso said he was "really convinced that it is possible to have a successful outcome of the Doha [trade] talks."

"The European Union and the United States have a joint responsibility to help deliver an agreement," Mr Barroso said, adding that the "negotiations are at a crucial phase."

Brussels and Washington are still at odds, though, over who will take the next crucial step - mainly on farm subsidies and agricultural market access - to kickstart the stalled negotiations.

The 149 members of the WTO are struggling to meet a late 2006 deadline for completion of the current round of trade talks.

"There is no disguising it's a political call that has got to be made at this stage, and a political call at the highest level. That is why this summit is timely," EU trade commissioner Peter Mandelson said according to Reuters news agency.

He also noted that intensive negotiations were going on at a technical level in Geneva where ministers from some key countries will meet next week on how to advance the talks.

"There is a lot riding on the next few weeks and so we need to take responsibility together - on our part that is what I will do," Mr Mandelson said in a statement.

The main focus of the agreement is the cutting of agricultural subsidies and other aid to farmers from rich countries in return for developing countries opening markets for manufactured goods.

Negotiations on the Doha round have been on-going for more than four years, with an overall aim of boosting the global economy and lifting millions out of poverty.

Warning from NGO

But NGOs warn that rich countries are pushing for trade deals that could leave poor countries worse off.

Oxfam is pessimistic about this round of trade talks succeeding believing that both the EU and US will stick to their protectionist positions on agriculture while asking poor countries to open their services and manufacturing markets.

"The danger is that both the EU and the US want to maintain their unfair agriculture models and seem willing to sacrifice the potential of this round to lift millions of people out of poverty," said Oxfam spokesman Louis Belanger.

Benefits from a global trade deal

Meanwhile, a recent OECD report on agriculture policies launched in Brussels outlines the benefits of cutting farm subsidies.

"We think there is an incredibly strong case for reform in agriculture policies," said Ken Ash from the organisation for economic co-operation and development, OECD.

"I think that all who signed up to the Doha round know that there are benefits," Mr Ash said, adding that the organisation's message is that national governments' existing policies are old fashioned.

"Most of the support [for the agriculture sector] is disconnected from the current objectives of rural prosperity and environment policies", he said by way of example.

"The deeper the reform the more effective it will be," he stated.

According to the report, published last week, a world trade deal that cuts trade-distorting farm subsidies and tariffs in half would boost global income by almost €21 billion a year, with more than one third of the gains going to the EU.

"There is no reason not to open up," Mr Ash said explaining that there would be "large gains particularly in the developing countries".

He admitted there might be "significant one-off losses" in some countries but that reform would still be worth while.

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