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Trade powers struggle to save WTO round

Posted: Tuesday, July 22, 2008, 16:17 (BST)
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Nath is due back in Geneva on Wednesday.

The United States and the European Union - both of which have strong farm and industrial lobbies - have called on emerging countries like Brazil, India and China to offer more.

"I have to say that after (Monday's) meeting I am less optimistic than before," Egyptian Trade Minister Rachid Mohamed Rachid told Reuters after no tangible progress was made.

Failure at Geneva would not only be a blow for trade liberalisation but some analysts say it would also put greater doubt over multilateral talks such as the attempt to find a successor to the Kyoto Protocol on global climate change.

"FALSE APPEARANCE OF PROGRESS"

Negotiators are walking a line between trying to move the talks to a conclusion and ensuring they do not alienate powerful lobbies at home. A group of U.S. senators sent a letter to U.S. trade chief Susan Schwab warning her not to give too much.

"At a time when our economy is slowing, there couldn't be a worst time to entertain foreign countries' attacks on our domestic trade laws," said Republican Senator Olympia Snowe, one of the signatories of the letter.

"We are making it clear that the false appearance of progress and momentum is not an acceptable trade-off for weakening our trade laws and damaging our economy," Snowe said, noting Congress would oppose such a deal.

Latest WTO proposals would require the United States to cut trade-distorting farm subsidies to a range of $13 billion to $16.4 billion a year (6.4 billion to 8 billion pounds) from a current ceiling of $48.2 billion.

The range is above current U.S. spending on subsidies of about $7 billion although the handout figure is low because global foods prices are so high.

The EU is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.



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