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Hong Kong WTO talks `critical': Blair

Australia's Prime Minister John Howard, left, chats with British Prime Minister Tony Blair during an afternoon retreat session on the second day of the Commonwealth Heads of Government Meeting, at a hotel near Valletta in Malta, on Saturday. PHOTO: AP

WTO talks in Hong Kong next month aimed at reducing international barriers may struggle to bridge gaps and British Prime Minister Tony Blair said they represent a "critical moment" for the body.

While Blair urged all parties to be "bold" in what they offered, a work program presented by WTO Director-General Pascal Lamy on Saturday in Geneva indicated that the WTO is far from reaching an agreement on issues including farm aid, according to a copy of the draft text published on the organization's Web site.

The biggest obstacles are agricultural talks and disputes about cuts in tariffs, domestic subsidies and export grants for farmers. The WTO initially aimed to come up with a draft comprehensive deal in Hong Kong, though earlier this month Lamy said he'd abandoned that goal.

"In particular, it was clear that, following the decision at the Heads of Delegation meeting that full modalities will not be achieved in Hong Kong," Lamy's draft text said.

Lamy based his outline on reports by the chief negotiators of each area of discussion on the status of talks. Some governments are talking about another summit early next year to help complete a framework for agreements by 2007.

"This is an absolutely critical moment of decision for the whole WTO," Blair said in Malta, where he was attending a summit of leaders of British Commonwealth countries.

"If we don't get a significant movement in Hong Kong, subsequently there is a danger that the whole round fails and that would be disastrous for economies both developed and developing," he said.

The 53 Commonwealth countries, who together account for one-fifth of world trade, said in a joint statement that they want their respective negotiators to be "flexible" in the Hong Kong meeting. They called on developed nations to display "political courage" and "give more than they receive" in the round, particularly on agriculture and market access.

New Zealand's Crawford Falconer, who heads the agriculture negotiations, said on Nov. 22 that "major gaps are yet to be bridged" on the size of farm tariff cuts and that the "fundamental divergence" over the treatment of politically sensitive products "needs to be resolved."

EU Trade Commissioner Peter Mandelson and US Trade Rep-resentative Robert Portman said earlier last week that the 148-member WTO had moved closer to overcoming differences over farm aid and tariffs in the run-up to the Hong Kong summit.

Yet Mandelson added that reaching a new trade agreement also depends on progress on non-farm issues, according to an editorial in French daily Le Figaro on Saturday.

"There can be no accord in Hong Kong without progress on the non-agricultural files," he wrote in Figaro's opinion pages.

"Europe is the biggest exporter of industrial products in the world and if concessions are made on the agricultural side, then we must obtain real advances for industry," he wrote.

Brazil and India have insisted that farm subsidies and tariffs are the key issue, and along with China are the leading developing nations in refusing to negotiate on industrial tariffs or commercial services until the EU offers better market access.

The so-called Doha trade round, which could lift tens of millions of people from poverty and bring new zest to global economic growth, should have been finished by last year.

The WTO's last two ministerial meetings in 1999 and 2003 collapsed because of spats between rich and poor nations.
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