The World Trade Organization (WTO) sought on Friday to rekindle hopes of a global trade deal after talks between four major powers collapsed.
U.S. Trade Representative Susan Schwab, Brazilian Foreign Minister Celso Amorim and the European Union's Peter Mandelson, headed for Geneva after a meeting in Potsdam, Germany, failed to overcome divisions.
Success at Potsdam by the G4 (Group of Four), also attended by Indian Commerce and Industry Minister Kamal Nath, was seen as important to salvaging the WTO's so-called Doha round after nearly six years of frustrated negotiations. An Indian embassy official denied an earlier report that Nath also had gone to Geneva.
Following the breakdown, which developing- and rich-country representatives blamed on each other, WTO Director-General Pascal Lamy summoned the WTO's Doha steering group for a Friday meeting to underline the search for an accord would go on.
Convergence among these (the G4) members would have been helpful to pave the way towards multilateral convergence. But helpful does not mean indispensable, Lamy said in a statement.
I now call on the members of the G4 to contribute to the multilateral negotiating process, which will continue as of today in Geneva.
Launched in the Qatari capital in late 2001, the WTO's latest intended free trade pact was meant to steady the global economy after the September 11 attacks on the United States and address inequities making it difficult for poor country goods to compete on the global market.
PROBLEMS FROM THE START
But it faced problems from the start, mainly over the issue of agriculture, which is highly sensitive almost everywhere.
Washington and Brussels have demanded that any deal that significantly cuts agricultural protections must open new export markets around the world in farming, manufacturing and services.
Developing economies are looking for new opportunities to export their own farm and manufacturing goods. They argue rich countries should not expect big new market access in exchange for cutting their trade-distorting farm subsidies and tariffs.
Trade sources said that the United States, which was widely blamed last year when a similar G4 failure brought the round to the brink of collapse, had offered deeper subsidy cuts in Potsdam, suggesting an annual ceiling of $17 billion.
But Brazil and India said it was still not enough and were unwilling to move on industrial tariffs, they said.
While trade officials warned it would be hard for the full 150-member WTO to meet an end-July target for a Doha deal without a preparatory agreement in Potsdam, ministers insisted the multilateral process was not yet dead.
Despite the Potsdam setback, trade officials said that the heads of the main WTO negotiating committees on farm and industrial goods would go ahead and present draft proposals for bridging differences as planned by the end of next week.
Time is running short, however. Lamy has said that without a breakthrough by August, the negotiations could be put on hold for several more years or even fail altogether, leading to a rise in protectionist measures and trade disputes.