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India, EU work to end Doha stalemate

By DONNA BORAK, UPI Business Correspondent   |   Jan. 24, 2006 at 3:38 PM   |   Comments

WASHINGTON, Jan. 24 (UPI) -- In a bid to avert stalemate in global trade talks, Indian Commerce and Trade Minister Kamal Nath announced plans Tuesday to work with European Union counterparts to break the impasse in Doha negotiations.

Nath's signal to initiate bilateral talks with the EU came a day after Brussels' top trade envoy accused emerging developing countries like India and Brazil of risking world trade talks by failing to lower tariff barriers to European imports.

"Europe is ready to give more than others," said Peter Mandelson, European trade commissioner in Berlin before the German business community on Monday. "There is no alternative to negotiation. I am sure Europe is willing to move faster and go further where that is appropriate - but not in a race with ourselves."

The EU has in recent weeks called on emerging developing countries to show greater flexibility in revising their offers on industrial tariffs and services. Brussels has made it clear it will be unable to make further movements on liberalizing agricultural market access, if it does not receive concessions from other trading partners on these two vital sectors.

Mandelson has also been putting pressure on Washington to urge emerging developing countries to make movements on industrial tariffs and services or risk a "minimalist outcome."

The United States which has repeatedly called on the European Union to make further movement on agricultural market access has been working to get both groups of trading partners to move in parallel to make progress on talks.

"They should move together," said Portman, urging the EU to advance its agricultural proposal to gain further market access and emerging developing countries to move on industrial tariffs and services.

"At this point, where we are, unless the EU steps forward on agriculture, emerging developing countries including India and Brazil and others will not step forward on industrial tariffs and services, and the United States, frankly, will not be able to deliver on its proposal regarding subsidies with the conditionality expressed in our agreement," said Portman.

While Mandelson has described the current state of negotiations as "serious, but not desperate," he has called on trading partners to unblock long-protected sectors in order to promote growth in the world economy and achieve an ambitious successful round.

Brazil and India, which lead the Group of 20 developing nations, have held fast to protectionist policies due to residual fears that a reduction of barriers would create an influx of developed goods that would ultimately affect world prices, making it harder for poorer countries to compete.

But according to a study by the World Bank, total world gain in liberalizing agriculture would be $248 billion with poor nations gaining $142 billion alone. The same study also indicated that if developed countries removed protective barriers they would stand to gain $111 billion.

Mandelson reiterated similar remarks in his speech in Berlin Monday arguing that developing countries stand to gain the most out of liberalizing services in trade. The EU trade chief said developing countries in recent years have shifted away from agricultural trade to trade in industrial goods and services.

While Mandelson has been under pressure by trading partners, including the United States, to make further movements on agricultural market access, India came to Europe's defense Tuesday, saying it had put forward the most aggressive proposal than any other WTO member.

In recent months -- especially leading into the Hong Kong ministerial last December -- major trading partners like the United States and the European Union have been under pressure to make aggressive cuts in trade-distorting support in agriculture. But economists have argued advanced developing countries must do their part in cutting industrial tariffs and opening up their services sector in order to achieve an ambitious and successful round.

Some economists have also suggested that if India and Brazil reduced their industrial tariffs and services sectors, the EU would be willing to make further movements on agricultural market access -- a major sticking point in negotiations.

India's decision to meet with Mandelson for bilateral consultations in Britain from Jan. 31 to Feb. 1, following the conclusion of this week's world economic summit in Davos, Switzerland, may bring a fresh impetus to stalled negotiations, which were launched in Qatar in 2001.

The United States and the EU have been at odds how to break the impasse in trade talks, but Washington indicated last week negotiators have developed "an understanding of what the ultimate bargain could be now."

Negotiators from roughly 30 key countries are expected to hold sidebar meetings during the World Economic Forum this week on Doha negotiations. It will be the first time ministers will reconvene after leaving negotiations in Hong Kong.

© 2006 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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