Wednesday, February 04, 2009

Trade Ministers to Strive for Doha Deal This Year

Trade Ministers to Strive for Doha Deal This Year

Trade ministers from two dozen countries pledged on Saturday to seek to resolve this year their remaining differences in the Doha Round of world trade talks.

In a statement, released after the ministers met on the sidelines of the World Economic Forum in this Swiss ski resort, they also pledged to refrain from raising new trade barriers.

Ahead of the talks, hosted by the Swiss government, politicians warned that measures to block imports to save jobs would deepen the crisis, as happened in the 1930s Great Depression.

Swiss Economy Minister Doris Leuthard said ministers could meet on the Doha Round before the April 2 G20 summit of world leaders, which wants to settle on clear actions for tackling the global economic and financial crisis.

"We have to build a better understanding for trade at home. The opening up of markets is the best (thing) we can do to fight the crisis," she said.


Leuthard said the negotiations were in good shape and Canadian Trade Minister Stockwell Day was equally upbeat.

"There was a very strong focus (that) there should be no lapses back into anything protectionist," he said. "There is a high level of optimism and a high level of desire that something would happen.”

"There is momentum coming out of this meeting."

Acting U.S. Trade Representative Peter Allgeier said Washington was working to ensure that any stimulus package for its economy was in line with international trade rules.

Ministers had expressed concern that "Buy America" provisions in the $825 billion stimulus bill passed by the House of Representatives could shut imports of other countries out of the U.S. market and fuel protectionism.

Many fear the rules would prompt a wave of tit-for-tat measures, exactly as happened in the 1930s.

"We are certainly working with the Congress, with the White House, to make sure whatever we do in response to the economic crisis is consistent with our obligations," Allgeier told Reuters after the meeting.

The gloomy economic situation and protectionist measures already taken by several trading powers, however, make for a tough backdrop.

The European Union imposed on Saturday import duties of up to 85 percent on screws and bolts from China, a move likely to trigger retaliatory action by Beijing at the WTO.

In recent weeks, top trading powers such as the United States, China and Germany have reported falls in exports at the end of last year, and international air cargo volumes dropped by nearly one fifth in December.

Unanswered Call

At a summit in November to tackle the economic crisis, leaders of the G20 rich and emerging nations agreed to push for a breakthrough in the Doha talks, launched seven years before, by the end of 2008, and not to raise any new barriers to trade.

However, WTO Director-General Pascal Lamy then decided that the gaps were still too wide to call in ministers for a final push, in spite of progress on several thorny issues in industry and farming over the year.

The G20 meeting was quickly followed by tariff hikes by India on steel and by non-WTO member Russia on cars.

Since then, the European Union has outraged farm exporters, rich and poor, by resuming export subsidies on dairy produce -- something that would be banned under a Doha agreement but is allowed under current trade rules.

"It's of deep concern," New Zealand Trade Minister Tim Groser told Reuters ahead of Saturday's talks. "I hope to see the suspension of these measures as soon as possible to avoid other countries following suit."

Ministers hope the next meeting of the G20, to be hosted by UK Prime Minister Gordon Brown in early April, will renew the push for a Doha deal and a commitment to trade openness.

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