Financial Times (London, England)

July 9, 2005 Saturday
London Edition 1

SECTION: INTERNATIONAL NEWS - G8 GLENEAGLES SUMMIT; Pg. 8

LENGTH: 591 words

HEADLINE: G8 mood and Doha talks 'show disconnect' WORLD TRADE:

BYLINE: By ALAN BEATTIE

DATELINE: GLENEAGLES

BODY:


Officials at the World Trade Organisation in Geneva yesterday identified a"bizarre disconnect" between the enthusiastic rhetoric from G8 leaders in Gleneagles on pushing ahead with trade talks and intransigence from negotiators that has brought the Doha round almost to a halt.

Tim Groser, the New Zealander who chairs the agriculture negotiations, told WTO members there were wide differences between them and he was unlikely to be able to produce a first draft of the likely agriculture deal by the end of this month, the original deadline.

Talks on reducing goods tariffs have also stalled. Supachai Panitchpakdi, the WTO director-general, told WTO ambassadors yesterday: "Progress is nowhere near sufficient in terms of our critical path to Hong Kong."

A meeting took place in Gleneagles on Thursday morning between the G8, the five big developing countries attending the conference, including India and China, and Mr Supachai. Officials who observed the meeting said there was great determination to push the Doha round forward, quoting President George W. Bush as saying: "We've got to get a deal."

Even Jacques Chirac, the French president whose government is often reluctant to embrace agricultural liberalisation, seemed eager, they said.

But Mr Supachai said yesterday: "Frankly, it is sobering to pass from the high level of expectations and hopes that I have encountered in Scotland to the reality of the negotiating process here in Geneva."

The talks have slowed across a range of issues, but trade officials in Geneva and development campaigners were almost unanimous in identifying the main sticking-point as the European Union's refusal to compromise on the mathematical formula used to cut farm tariffs.

For some developing countries, access for their produce to European markets through lower tariffs is as important as cutting EU agricultural subsidies.

But the EU, which has high farm tariffs, has argued for a similar formula used in the previous Uruguay round of trade talks, which would result in limited cuts. The US, the "Cairns Group" of agricultural exporters and the Group of 20 developing countries have argued for much more ambitious tariff cuts.

"If we are going to get a breakthrough, we really need to agree a formula," said one WTO ambassador from a Cairns Group country yesterday.

"The Europeans are offering far too little."

A US trade official said more progress was needed across the different elements of the round - agriculture, goods and services. But he added: "Market access in agriculture is the one that needs the most attention."

Another official in Geneva, who takes a neutral role in the negotiations, said the EU negotiators in Geneva were being forced to stick to their existing line by the lack of a new negotiating mandate. "The Commission appears in complete paralysis over this," he said.

A spokeswoman for Peter Mandelson, EU trade commissioner, said that the EU could not be blamed for holding up the talks and that other countries also had to make concessions. "The objective is to make progress on all issues, not just market access in agriculture," she said.

Other issues at stake include a dispute over US food aid, which some WTO members including the EU regard as thinly disguised farm export subsidies, but most officials said that was not a big problem for now.

Ministers from a selected group of countries will meet in China next week, in the latest of a series of meetings to try to push the talks forward.

The farm tariff talks are likely to be the most important issue on the agenda, officials said.

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