Brussels, 06/11/2007 (Agence Europe) - According to the Brazilian and Indian chief negotiators, considerable progress can still be made towards the hoped-for compromise on world trade liberalisation before the end of the year. Last week, Indian Trade Minister Kamal Nath said that agreement was “closer than ever”. “We lack only a little bit of political will to get a final result. I think that it is possible that at the end of the year we will reach an accord on basic numbers,” said Brazilian Foreign Minister Celso Amorim on Monday 5 November. The optimism of the leaders of the G20 group of emerging countries contrasts with the caution still being shown by the EU. Addressing the European Parliament development committee on the same day, EU Trade Commissioner Peter Mandelson again highlighted the possible advantages deriving from liberalisation of world trade, both in terms of new trading opportunities for developing countries, particularly for South-South trade, and discipline on agricultural subsidies in the rich countries. He warned, however, of the danger of continuing impasse on the chapter on industrial goods (NAMA). “There is a large imbalance in what developed and developing countries are being asked to do. Now an attempt is being made to shift the goalposts further to the point where emerging countries will end up making next to no contribution to new trade flows in the Round. That is simply not acceptable. Not just for the EU, but because this would negate any gains from South-South trade,” he said.
Several negotiators in Geneva were expecting the conclusion of the round by December, but the growing number of maximalist demands from some WTO members, criticism of the Falconer-Stephenson draft compromises and counter-proposals make this increasingly unlikely. The EU and the United States believe that that emerging countries are still reluctant to open their markets to industrial goods - with the liberalisation of trade in services, this is the price that these countries will have to pay to get a significant reduction in American agricultural subsidies and improved access to the European agricultural market. Washington feels, too, that some developed countries, such as the G10 net agriculture importing countries, mainly Japan and Switzerland, are not sufficiently prepared to open their borders in the agricultural sector. Conversely, the emerging countries, led by South Africa, Brazil and India, reproach the United States for asking them to further open their industry to competition, even before making concessions on genuine reductions in their trade distorting agricultural subsidies. There still remain criticisms in Geneva of the level of European agricultural subsidies, but, in 2003, the EU began a reform of the CAP to reduce them. The US must now make similar efforts, but the chances of reform are much less certain since Congress is still debating the new Farm Bill. Given all of this, an agreement before the end of 2007 seems increasingly unlikely. Nevertheless, revised compromise texts on agriculture and NAMA are expected in Geneva by mid-November.
The fact remains that a further delay in concluding the Round would, according to the Commission, be bad for the EU from a tactical point of view. If, because there were no agreement, the Round were to be frozen until 2009, the EU would be penalised twice over, warned a source close to European Agriculture Commissioner Mariann Fischer Boel last week. It would become more difficult to “sell” the 2003 CAP reform to Geneva. In addition, negotiations on post-2013 EU funding will be taking place, and this will increase the pressure for new agricultural reform. (E.H.)