Global Policy Forum

By Sanjay Suri

An informal summit in London Monday night brought clear indications that little agreement can be expected at a meeting of ministers in Hong Kong next month to agree a new trade deal.

The 'G4' summit hosted by the Indian government in London brought together European Union trade commissioner Peter Mandelson, U.S. trade representative Rob Portman, and Brazilian minister for external relations Celso Amorim besides Indian commerce minister Kamal Nath. Japanese trade and industry minister T. Nikai attended as guest. The mini-summit was called in another attempt to break the deadlock over the Doha development round of talks. The talks were started in Doha in Qatar to work out a new global trade agreement among member countries of the World Trade Organisation (WTO).

The talks have stalled mainly over refusal of the European Union (EU) and other developed countries to drop subsidies on agricultural goods. As the EU sees it, much of the problem arises because developing countries are not opening their markets to industrial goods and services from the developed countries. Mandelson offered some concessions on subsidies and tariffs on import of agricultural goods. He offered to cut average EU agriculture tariff from 22.8 percent to 12.2 percent. He also offered a 70 percent reduction in agriculture subsidies. This ''bold offer'', he said, was as far as Europe would go. Several independent development groups said the offer was outrageously little. Mandelson refused to budge from that position at the Monday talks. ''There is no change in the positions,'' Kamal Nath told IPS after the meeting.

That meant that developing countries too will not give in to EU demands on non-agricultural market access (Nama). ''Obviously expectations in Hong Kong have to be tempered based on the availability of time, and the continuing divergence on various issues,'' Kamal Nath said. ''Expectations from Hong Kong are not what they were two months ago,'' he added. ''That is clear enough.'' The holding of such talks could itself become misleading, even comical, Amorim told media representatives after the talks. With all ''the diplomatic drama, or comedy for that matter, I think there is a lot of ground where the gaps are still very big,'' he said. ''Of course divergences remain,'' Mandelson said. He said a discussion like this now needed to ''be enlarged to a broader section of countries and WTO members.''

Talks are now expected to continue well into the next year, and possibly beyond. ''We're not lowering the expectation of the round,'' Nath said. ''There is next year to continue negotiations.'' For developing countries again, no result could prove better than a bad result, as at the last WTO ministers meeting in Cancun in Mexico in September 2003. ''We're not going to have just any result, we must have a result which is consistent with the object of a development round,'' Nath told IPS.

In an article in the International Herald Tribune Oct. 30, Peter Mandelson said that besides cutting its ''trade distorting farm supports'' by 70 percent, the EU would agree to ''eliminate all agricultural export subsidies by an agreed date if others offer watertight commitments to do the same in their equivalent programmes.'' This he said, ''is also Europe's bottom line, because we also have to respect our responsibilities to European farmers.''

Kamal Nath spoke of this as merely ''a good starting point'' for further talks. And he said a country like India would not even consider the demands for industrial goods and services access that the EU is talking about. The impasse has led to an apprehension that this round of talks that began in Doha in 2001 will not only be delayed further, but might actually get derailed.

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