Global Policy Forum

By Larry Elliott

Negotiators still struggle to find compromise

A formal relaunch of the stalled global trade talks was deferred for at least two months yesterday after the World Trade Organisation admitted that deep differences between rich and poor countries among its 146 members had yet to be settled. Hopes were fading last night that the WTO would be able to complete the round of liberalisation talks on schedule on January 1 2005 as the stalemate continued, even though officials in Geneva remained optimistic that rapid progress in the first six months of next year could allow the deadline to be met.

Three months after negotiations broke down in chaos after a week of acrimonious discussion in Cancún, Mexico, the WTO finally admitted that they were not able to set a new timetable at yesterday's meeting.

The WTO said last night there were signs that the parties were coming closer together following divisions on a range of issues, but that there was still not enough common ground. "Our collective aim for today, as instructed by ministers at Cancún, was to arrive at a point where the negotiations can resume full momentum," WTO director-general Supachai Panitchpakdi told trade envoys. "We are not yet at this point but we should not be disheartened."

Both Mr Supachai, who has held a series of meetings with trade ministers, and the president of the WTO's executive general council, ambassador Carlos Pérez del Castillo of Uruguay, who has been acting as mediator in Geneva, said there were some signs that the Cancún deadlock could be broken.

Among the issues causing most controversy are the subsidies paid to farmers in rich developed countries, the lack of access to western markets for poor cotton producers in West Africa, and demands from the European Union that the WTO talks should include four new issues - investment, competition, government procurement and rules governing trade.

With Washington preoccupied by the presidential elections next year and the European Union convulsed by a row between free traders and protectionists, WTO officials had privately ruled out several weeks ago any possibility of an immediate full scale resumption of the negotiations launched in Doha, Qatar, in November 2001.

Even so, the WTO said it believed members could start to talk in February about specific issues using a compromise text put forward in Cancún by Mexican foreign minister Luis Ernesto Derbez and which had been spurned at the time by developing countries. "We are not talking about breakthroughs, but the mood has improved," said WTO spokesman Keith Rockwell.

"Today's announcement, while not a surprise, is a huge disappointment to millions of poor people that could benefit from trade reform," said Michael Bailey, senior policy adviser at Oxfam. "Since talks collapsed in Cancún, developing countries have shown their willingness to get back to the negotiating table. It is rich country stubbornness that has caused today's stalemate. There was bound to be a period of re-assessment but the time has come to put an end to the hand-wringing and finger pointing and revive genuine negotiations."

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