'Striptease' summit called to save trade talks

Six of the leading players in the long-running global trade talks are to meet in London next month for what is being billed as a "collective striptease" to unblock deadlocked negotiations through a series of mutual concessions.

With time running out before the end of the April deadline for deals on agricultural and manufacturing tariffs, the two days of talks at the Indian high commission are designed to broker simultaneous compromises to satisfy both rich developed countries and developing nations.

Sources close to the meeting - which will start on March 10 - said that the aim was a deal in which deeper cuts in support for farmers in the European Union, the United States and Japan would be matched by concessions from India and Brazil on manufactured goods and by China on services. "We can't keep blowing off deadlines", one source said. "The meeting may not result in full agreement but we hope to be in a position where it is possible to close the remaining gaps over the subsequent six to seven weeks. It will be a collective striptease in which everybody says 'this is what we've got'."

The talks will be hosted by India's trade minister, Kamal Nath, and follow weeks of intense discussions among trade negotiators in Geneva after the inconclusive meeting of the World Trade Organisation in Hong Kong last December. They will be attended by the EU, the US, Japan, Brazil and Australia.

Attempts to broker a new round of trade liberalisation foundered in Seattle in December 1999 but finally got off the ground in Doha in November 2001. Talks have subsequently progressed slowly and are now bogged down in a dispute between the west and the leading developing countries.

The European Union, in particular, has come under pressure to offer better access to its market for lower-cost producers of farm products elsewhere in the world but wants better opportunities for its industrial exporters in Brazil and India in return.

After the failure to reach an agreement in Hong Kong, the WTO's 150 members gave themselves until the end of April to settle their differences in agricultural and manufactured goods. Sources said yesterday that there was now a growing recognition of the need for urgency and that the detailed discussions in Geneva were heading in the right direction. "We are starting to see what an outline deal might look like," one trade source said.

The G6 is hoping that the two-day London meeting will come up with formulas in agriculture and manufacturing that will allow negotiators in Geneva to ink in the details over the coming weeks.

In agriculture, that will mean agreeing how deep cuts in protection should be in four separate bands, with the biggest tariff reductions coming in those sectors that are most heavily protected. A limited number of agricultural product lines will be exempt from the deal but WTO members have yet to agree on how many should be included. Brazil and India will be expected to offer tariff cuts in manufactured products that will represent real rather than cosmetic cuts in protection, while China will have to open its financial sector to foreign firms.

One G6 source said yesterday that there was an acceptance that members would have to risk political flak at home if they wanted to secure a deal. "There comes a time when you can't keep saying 'no'. You have to start saying 'yes'," the source said.

Pascal Lamy, the WTO's director general, has warned member governments that a final package must be ready by the end of the year, with a framework agreement on agriculture and manufacturing agreed by spring.

If the deadline is missed, the fear is that any subsequent agreement would be picked apart by an increasingly protectionist US Congress. While fast-track legislation is in force, Congress would have to consider a WTO deal on a take-it-or-leave-it basis but that expires in June next year. In talks with American legislators last week, Mr Lamy was told that there was no chance of the fast-track mandate being renewed.

Trade lobby groups said much still needed to be done to finalise an agreement by the end of April, and that there was little evidence that the G6 was prepared to stop political posturing. "I'm not sure that anybody is ready to put their cards on the table," said Amy Barry of Oxfam. "They should be ready if they are serious about the April deadline but nothing coming out of Geneva or the capitals of the G6 gives me much sense that the ducks are all in a row."

Backstory

The latest round of trade talks was launched in Doha four years ago. It was billed as a "development round" after poor countries said their interests had been overlooked in the Uruguay Round, which was completed after seven years of talks in 1993. Riots and a stand-off between developed and developing countries stymied the first attempt to start the new round in Seattle in 1999, and there was a setback in Cancun in 2003, when the talks collapsed. Negotiations are in their end game, with developing countries still unhappy about concessions on offer.