Doha development package in jeopardy

By DONNA BORAK, UPI Business Correspondent  |  Dec. 14, 2005 at 11:07 AM
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HONG KONG, Dec. 14 (UPI) -- Despite a U.S. proposal to double its aid for a trade package for least-developed countries, the European Union's top trade official warned Wednesday a key development package to help poor nations might be in jeopardy.

"I'm worried that the LDC package could now be in some trouble," said Peter Mandelson, EU trade commissioner. "They shared with me some concerns, that there is some resistance, points of disagreement among WTO members."

Members of the least-developed countries raised concerns with Mandelson over the duty-free, quota-free agreement, which rich nations have been offering to help poor nations. According to the EU trade chief, some poor nations have been resistant to the scope of the deal, product coverage and country coverage, warning all outstanding issues will need to be dealt with before a development package can be agreed upon.

The EU's warning came shortly after Mandelson called on developed countries to commit to providing duty-free, quota-free access, a proposal the EU has been aggressively pushing to complete this week.

"All developed countries should commit to providing duty- and quota-free access to all products from all least-developed countries," he said. "Those advanced developing countries in a position to do so should make the same commitment."

This week's round of trade liberalization talks in Hong Kong have been centered on reaching a development package for the world's 49 least-developed countries, after negotiations became blocked due to reticence by some European nations to make further moves on their farm proposals.

The European Union, which has been blamed for blocking agriculture negotiations in the so-called Doha round, has been aggressively pushing for a successful conclusion of a development package to help poor nations this week, hoping to shift attention away from its reluctance to make further moves on its farm proposals.

Mandelson warned that if developed countries did not deliver on a development package, it would threaten the credibility of the multilateral trading system.

"If we cannot deliver on this, the world will wonder what we're doing in Hong Kong," said Mandelson. "It's important to our credibility. It's important for the integrity of this round."

The United States, which pledged Wednesday to redouble its aid-for-trade package to the least-developed nations, urged trade ministers this week to make further offers to complete an aggressive development package.

"We must be proactive this week in giving least-developed countries development assistance and we must support trade capacity building to complement the progress we are trying to make in opening markets and unleashing trade," said Rob Portman, U.S. trade representative, during a plenary session Wednesday.

The U.S. aid-for-trade package promises to more than treble its contribution from $1.3 billion to $4.7 billion in grants over five years.

"One of the reasons the U.S. aid-for-trade proposal is so important, is because it's going to help build the infrastructure that these countries need to get their products to market, to be able to do a better job of playing in the global trading system," said Karan Bhatia, deputy U.S. trade representative.

While the United States has been fully supportive of quota-free, duty-free access for least developed countries on "virtually" all products, it faces strong domestic pressure from the U.S. Congress on specific sectors, including textiles. However, Washington has been engaging in discussions with poor nations.

"We've been talking to them about expanding their access or trying to find a way to accommodate them, but we don't want to do it in a way that prejudices the main gain," a U.S. trade official, told United Press International.

Ranking member of the Senate Finance committee Sen. Charles Grassley, R.-Iowa, warned Wednesday that cotton and duty-free, quota-free proposals could override the focus of talks this week.

"The European Union is trying to change the subject. Without a better EU market access offer, countries won't reach agreement on agriculture. And without agreement on agriculture, Doha won't conclude," he said. "If the Doha round doesn't conclude, the cotton countries, the least-developed countries, and all other WTO countries can expect more of the status quo."

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