Wednesday, September 17, 2008

Some flexibility over WTO impasse - Mandelson

Europe's trade chief said on Monday he saw some flexibility in talks over a dispute that scuppered a push for a global trade pact in July, but he stressed it was still too early to tell if a deal could be done.

Envoys from trade powers last week discussed an impasse over a mechanism to protect developing countries from food import surges and there were "some cautiously encouraging signals of flexibility", EU Trade Commissioner Peter Mandelson said.

"It is still early days and we will need to see if senior officials are given the leeway they will certainly need to tease out a technical solution which satisfies all parties," Mandelson told members of the European Parliament.

"This will also give us indications as to the political will to continue in the US and in India, amongst others."

The so-called "special safeguard mechanism" to protect poor farmers when import volumes spike or prices fall proved the stumbling block in July when trade ministers tried to settle the core elements of the WTO's seven-year-old Doha round.

The United States said at the time that demands for protection by developing countries, in particular India, would deny its farmers the chance of exporting to new markets.

Mandelson said other issues stood in the way of a WTO deal, including cuts to cotton subsidies, chiefly in the United States, China's willingness to open its markets further and global trade in manufactured goods in general.

He also said a new ministerial-level meeting, similar to July's failed negotiations, would be needed in the coming weeks before elections in key countries made any deal impossible.

As well as the US presidential vote in November, India is due to hold elections soon.

Mandelson reiterated that a final collapse of the Doha round of trade talks would seriously dent confidence in the global trading system and harm other international negotiations, notably on climate change.

"A definitive collapse of the Doha round - should we face this - would seriously dent confidence in the WTO's system of trade rules and future market openness, and have a significant knock-on effect on the multilateral system as a whole," he said.