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Trade powers meet to try to revive WTO talks

Major trading powers will meet in the Australian resort town of Cairns this week in a last-ditch bid to kickstart stalled WTO negotiations.

The meeting was initially called to mark the 20th anniversary of the Cairns Group, the 18-nation grouping of agricultural exporters formed in the tourist town alongside the Great Barrier Reef in 1986.

But after WTO talks were suspended in late July, Australia's Trade Minister Mark Vaile expanded the meeting to include US, EU and WTO representatives in the hope of reviving the negotiations.

Vaile said the Cairns talks would be the last chance to save the Doha Round of negotiations, which was supposed to deliver a deal to dismantle world agricultural and industrial trade barriers by the end of 2004, but dragged on until it was suspended with no conclusion.

"The round's not dead, but it really is only hanging by a thread -- the window is almost closed," Vaile said.

WTO chief Pascal Lamy, US Trade Representative Susan Schwab and US Agriculture Secretary Mike Johanns will all attend the Cairns meeting.

EU Trade Commissioner Peter Mandelson will not, although the EU's Australian ambassador will be there.

However, the initial hopes for a major advance in Cairns have faded, with even the WTO is playing down the prospect in the lead-up to the meeting.

WTO spokesman Keith Rockwell indicated the meeting was a opportunity to make incremental progress on negotiation points, rather than a chance for a dramatic catalyst that would immediately resolve the Doha Round after five years of talks.

"We don't expect this meeting to lead to a breakthrough, but it's important to keep pressure on members and the process [to restart negotiations]," he said.

He added that Lamy had been "rather stimulated" by the recent meeting of the G20 in Rio de Janeiro which he attended.

Looming in the back of negotiators' minds are November's mid-term Congressional elections in the US, which will play a crucial role in whether the administration of US President George W. Bush retains a mandate to negotiate trade deals.

The mandate -- called trade promotion authority (TPA) -- will expire in the middle of next year unless Congress votes to renew it in March or April, essentially putting negotiations on hold for at least another two years.

Rockwell said if the WTO could show some progress in negotiations, then it could help convince the Congress to renew the TPA.

New Zealand Trade Minister Phil Goff said the major players in "the engine room" of the WTO talks -- the EU, US and large developing nations such as India and Brazil -- needed to show leadership to keep the talks alive.

"There is still no clear sign that a breakthrough is imminent in the Doha Round negotiations -- most players in the WTO remain pessimistic that any movement will be possible until at least after the US congressional mid-term elections in early November," Goff said.

"We cannot, however, afford to assume that the round will fail. Such an assumption will be self-fulfilling."

The US and the EU have bitterly traded blame for the collapse of the talks, each accusing the other of inflexibility.

Vaile said he would propose a compromise over farm aid in an effort to break the deadlock between the pair.

He is expected to propose a compromise that would involve the US cutting its farm subsidies by a further US$5 billion and the EU reducing its tariffs by a further 5 percent.

But Australian National University economics professor Martin Richardson doubted the meeting would result in any real progress, particularly as the EU was not sending a major delegation.

"The large trade blocs are big on rhetoric about their commitment to openness and willingness to negotiate but they take extreme positions and are not prepared to take the small steps needed for compromise," he said.

"There's no sign that anyone's willing to change the positions that all sides are already familiar with so it's looking gloomy for a multilateral trade agreement," Richardson said.
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