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23rd Feb 2020

World trade deadlock hard to break, Mandelson says

  • If developing countries open up their markets, the EU will cut subsidies, the EU trade chief said (Photo: European Community, 2005)

With just three weeks to go before a self-imposed deadline, the EU's trade chief Peter Mandelson has said it will be hard to reach an agreement on the Doha trade talks.

"It is hard because there are a limited number of cards left on the table and they are the big ones," Mr Mandelson said on Tuesday (11 April) and added that "there are still wide gaps to be bridged."

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A 30 April deadline for a broad agreement on formulas to cut farm subsidies and industrial tariffs - as a move towards lowering global trade barriers - was set by the 149 member countries after the World Trade Organisation summit held in Hong Kong in December last year failed to complete the Doha trade round.

Since then, the negotiations to dismantle protection for wealthy countries' farmers have made little progress and many are sceptical that ministers will be able to meet the deadline.

"I am prepared to see Europe do more than others," Mr Mandelson said at the European Policy Centre think-tank in Brussels.

But he added that he was not prepared to take further steps unless Europe would get something in return. "We will not bring [Doha] to a conclusion unless it is a good deal [for Europe]," Mr Mandelson explained.

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.

Pascal Lamy, director general of the WTO, said last week that the US must accept further cuts to its agricultural subsidies, while the EU must lower its agricultural import tariffs.

Developing countries, known as the G20, have to meanwhile agree to lower their tariffs on the imports of industrial goods, Mr Lamy said in an interview with French daily Les Echos.

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

Countering this argument, Mr Mandelson explained that by helping poorer countries to prepare, world wide free trade could bring them benefits.

"I think that those developing countries who ... embrace it have a much greater chance of achieving their economic potential than those who want to remain inward-looking and closed," Mr Mandelson said.

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.

Doha talks between trade ministers from the 'group of six' - Australia, Brazil, EU, India, Japan, and the US - aimed at pushing forward the process, failed when they met in London last month.

The aim is to reach an overall agreement by late 2006, with US president George Bush's trade negotiating authority given to him by the US Congress expiring in July 2007.

Experts say it will be difficult to know when the US could implement any WTO agreement if negotiators miss the 2006 deadline.

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