Finance ministers from the world's seven wealthiest nations tried to inject momentum into stalled global trade talks yesterday in London, just two weeks ahead of a crucial WTO summit in Hong Kong.
The 148-nation WTO had aimed to provide a blueprint for a new global trade treaty that would boost developing countries' access to world markets. But agriculture has proved a sticking point and the EU, in particular, is under fire for not making sufficient cuts to its farm tariffs and subsidies.
Brazil, China and India are willing to advance on the opening up of trade in industrial goods and services if the US and Europe move over farm subsidies and tariffs, British Chancellor of the Exchequer Gordon Brown said.
"We do believe that this has been a meeting where we have shown that the world wishes to see the trade talks in Hong Kong coming to a successful conclusion," said Brown, who has invited ministers from India, Brazil, China, South Africa and Russia to the weekend meeting in the hope of making further progress.
Brown, who is hosting the G7 talks, said the Indian minister had said he was "prepared to make advances on the services negotiations" while Brazil had announced that "if other countries were to move alongside them they would be prepared to make advances on industrial tariffs and on services."
Chinese Finance Minister Jin Renqing (
Brazilian Finance Minister Antonio Palocci said any movement by his country on industrial tariffs was dependent on the US and the EU taking further steps on agriculture.
Despite four years of negotiations since the trade round kicked off in Doha, Qatar in 2001, hopes are fading that the WTO will agree a framework in Hong Kong that would lead to a deal on agriculture, industrial goods and services by the end of next year.
The UK has made tackling poverty in Africa and the developing world a key priority for its G8 presidency. It has already achieved commitments to cancel the debts of the world's poorest nations and to boost aid. The third crucial and as yet unfulfilled plank of the UK's G8 agenda is fair trade.
The G7 ministers, who gathered over dinner on Friday night at Brown's No. 11 Downing Street residence, were also expected to discuss interest rates, high energy prices and lopsided trade flows in further sessions yesterday.
The ministers are expected to call for greater investment in oil refining capacity, greater transparency over oil data and more investment in alternative energy sources as they did at the close of a September summit.
Interest rates were also expected to be on the agenda, after the European Central Bank decided Thursday to increase rates by a quarter of a percentage point to 2.25 percent, Japanese Finance Minister Sadakazu Tanigaki said.
The G7 -- the US, UK, Canada, France, Germany, Italy and Japan -- has also been warning of the dangers of skewed trade and investment since 2003 and the hefty US trade deficits are likely to figure in discussions.
Outgoing US Federal Reserve chairman Alan Greenspan, making his 55th and last appearance as Fed leader at a G7 gathering, warned on Friday of the threats posed by rising budget deficits.
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