A Slow-Go on DDA - USTR Schwab

US Trade Representative Susan Schwab yesterday all but ruled out the possibility that the United States will put a major new offer on the table to get the stalled World Trade Organization Doha Development Agenda trade round back on track, but expressed confidence the talks will eventually be revived (WTD, 10/3/06).

"We are in the resuscitation stage of the Doha round," Ms. Schwab told a gathering sponsored by the American Enterprise Institute.

The talks have moved beyond a stage where the United States - or any other WTO member - can single-handedly break the deadlock by putting a new offer on the table, the USTR stated. Washington tried that a year ago when it put a "big, bold" agriculture package on the table that would have drastically cut US farm supports and required a major rewrite of US farm policy.

The Administration tabled that offer thinking other countries would follow suit - but nothing happened. And even if the United States made a new offer now, Ms. Schwab predicted it would meet the same fate - despite calls from some other WTO members for the United States to "go first" again. "We've been there, done that and bought the t-shirt - it just doesn't work."

What will work is continued "quiet dialogues" that allow negotiators - out of the glare of the spotlight or deadline - to exchange ideas and test options. From those discussion will eventually emerge the outlines of an acceptable package, Ms Schwab said. The USTR spent the last few month traveling the globe to participate in a series of meetings with key WTO players. She also met in Washington with European Trade Commissioner Peter Mandelson.

'Can't Tell When'

"I am firmly confident there will be a successful Doha agreement," Ms. Schwab said. "I just can't tell you when." It should not be surprising Doha is taking longer than expected, since after nine rounds "only the hard stuff is left," she commented, adding "maybe we are victims of our own success."

As far as the United States is concerned, the final deal has to be a "big, balanced package, Ms. Schwab said. A "small, mediocre, watered-down package" will not be acceptable to the Administration and will be rejected by Congress. A "Doha light" also would fail to carry out the key development goals of the round.

Developing countries are playing a "healthy" role in the Doha talks - being more engaged than they have ever been before, Ms Schwab noted. But she added there is not a "North-South" divide in the round, as there are divisions among developing countries. The United States is encouraging China to play a bigger role in the negotiations, but so far Beijing is "still deciding how it wants to position itself." China needs to abandon the argument that as a new WTO member it deserves special treatment, because "that is not going to wash with the membership," she warned.

The USTR said she does not expect the outcome of next month's elections to affect the Administration's ability to carry out its trade policy. Regardless of which political party is in control, there is still a "critical mass" of both Democrats and Republicans in Congress who support trade liberalization, Ms. Schwab stated.