Lamy can persuade obdurate France

EXIM MATTERS

"A week is a long time in politics", said former BritishPrime Minister, Har old Wilson. For trade negotiators, a month does not seem to be enough.

With over four weeks still to go for the sixthMinisterial Conference of the trade ministers of the member countries ofthe World Trade Organisation (WTO) ministerial due at Hong Kong next month, the negotiators seem to have given up any hopes of a consensus declaration that will take the ambitious Doha Development Round to its conclusion by the year end.

On Saturday, Peter Mandelson, Trade Commissionerof European Union (EU) ruled out any chance of a deal from the WTO meet at Hong Kong. US trade chief Rob Portman echoed his pessimism.

Brazilian foreign minister Celso Amorim said "the gaps were still verybig" while India's Commerce Minister, Kamil Nath, rather thantalking about lifting the poorest from the depths of poverty, there had been too much talk on improving access for the richest countries to sell their goods.

The four key negotiators had met at London earlier last week and again at Geneva, but, failed to agree on how to take the trade talksforward.

The WTO negotiators have now downgraded their expectations of securing a major breakthrough at the WTO summit in Hong Kong starting on December 13. Now there is talk of another conference by March to make up for lost ground. On an optimistic note, the Director -General of WTO,Pascal Lamy said that the aim is still to finish the Doha round by next year-end.

The chairman of the Hong Kong summit John Tsang insisted thatall was not lost and that even if Hong Kong's goals were reduced, thesummit would still set the organisation on the path to concluding theDoha round.

At the core of all disagreements is the issue ofsubsidies that rich countries give their farmers. Poorer countries say that such farm subsidies depress world prices making it very difficult to sell their produce or improve their income.

Last month end, the EUoffered to reduce its highest agricultural tariff rates by 60 percentand its average tariffs by 46 percent. These offers were dismissed as inadequate by United States, India and Brazil. Moreover, India andBrazil refused to move ahead on other issues unless the EU offered a better deal.

The EU has been going through troubled times of late, with unemployment rising to over 17% for the entire region. In Italy, Belgium, France and Spain, more than 20% of the youth are jobless.

Manyanalysts attribute severe unemployment as the cause of civil disturbances in France and rejection of the EU constitution in a referendum held a few months back.

France gets maximum farm subsidies in the EU and is a major opponent of any reforms in the common agriculture policy of the EU or offers for subsidy cuts.

The spotlight now turns on Pascal Lamy, the WTO chief. He was the Trade Commissioner of EU till last year and is keenly aware of how far the EU can go in offering concessions to save the Doha talks.

He is French and knows precisely how subsidy cuts might play out in France. He needs to put his renowned negotiating skills to persuade the EU to come out with more credible offers to cut farm subsidies.

tncr@sify.com