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Outline Doha deal hangs in balance
Alan Beattie in New Delhi, FT.com
 
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December 05, 2008

The prospects for ministers pushing through an outline deal in the so-called Doha round of trade talks hang in the balance, with the US struggling with scepticism from Congress and its business and farm lobbies.

Pascal Lamy, the director-general of the World Trade Organisation, will make a decision this weekend or early next week on whether to take the risk of summoning ministers to a meeting in Geneva in mid-December. The meeting would be the last chance to strike an outline deal before the White House changes hands, after which trade officials say negotiations would probably go on hold for at least several months.

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  • The previous ministerial meeting in July broke down over an arcane agricultural issue � the so-called special safeguard mechanism, designed to let developing countries protect smallholder farmers from surges of agricultural imports � which pitted the US against India and China.

    Gopal Pillai, the Indian commerce secretary, said that a compromise was emerging on the mechanism. But other sticking points remained, particularly "sectoral" agreements that open whole industrial sectors to imports.

    "Sectorals have the potential to be a deal-breaker," said Mr Pillai.

    Trade officials based in Geneva said that the US appeared to be largely isolated on the sectoral issue, with the European Union much more willing to compromise in spite of pressure from its own business lobby.

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  • "Almost every other country is prepared to leave detailed discussion until later but the US wants specific commitments now," Mr Pillai said.

    US industry wants big emerging markets such as India, China and Brazil to open their chemicals, industrial machinery and electronics sectors to competition. But Mr Pillai said chemicals in particular was a huge category, taking in pharmaceuticals, soaps, detergents and plastics.

    July's ministerial meeting broke down over the US insistence that farm imports should have to increase by 40 per cent to trigger the special safeguard mechanism, with India asking for a 10 per cent trigger.

    Mr Pillai said it should be possible to work out a compromise whereby tariffs could be raised a certain amount after a 20 per cent import surge and again if imports rose by 40 per cent.

    Participants in the talks said that the White House seemed to be pushing hard for a framework deal, with the US trade representative's office more sceptical.

    Earlier this week, the most senior congressmen and senators on trade issues from both parties issued a joint letter warning against a rushed ministerial meeting.

    Some participants in the talks have questioned whether the administration of Barack Obama, the US president-elect, will back enthusiastically a deal that is opposed by the US business and farm lobby.

    On Wednesday Joseph Glauber, the chief US agricultural negotiator, told a conference in Washington: "We certainly have been pushed by leaders who well remember the lessons of the 1930s." But he added: "There's no question that it would be pointless to bring back an agreement that would be immediately rejected by agriculture and by Congress."

    Copyright: The Financial Times Limited 2008




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