Chance of a Doha breakthough ‘remote’

The prospects of any decisive breakthrough in the Doha Round of world trade talks this year are remote, says French Trade Minister Christine Lagarde.

"My personal view? It's not impossible, but especially before the [mid-year] expiry of the Trade Promotion Authority [the US Administration's negotiating mandate from Congress] the prospects are remote," said Lagarde, who was in Wellington for talks with her New Zealand counterpart Phil Goff.

"In the areas of services and industrial products we are not making progress. Unless that happens and there is clear indication of progress and opportunities in places where we have offensive [as opposed to defensive] interests it's going to be extremely difficult to expect success. Because it cannot be a one-sided deal."

Although fresh life was breathed into the Doha talks in the new year there has been little sign of further concessions on agricultural market access from the Europeans and reductions in domestic farm support by the United States.

Lagarde said the US Farm Bill proposed to Congress a month ago was "just extraordinary". "There's no change. In an area where clearly there has to be give and take on all sides, the giving is a little bit one-sided."

She contrasted US rhetoric with Europe's record of actually carrying out the reforms it agreed - with the Doha round in mind - in 2003.

Those reforms, she said, infuriated many European farmers including French farmers.

"The reforms we have implemented, not just talked about, clearly indicate that we mean it when we say we want to reform the support system, that we know it has to be reformed. We are proceeding to do it - which we do not see happening in the USA."

President Jacques Chirac has reportedly professed shock at concessions European trade commissioner Peter Mandelson is prepared to make in the quest for a deal.

But yesterday Lagarde would not go quite so far as to accuse Mandelson of exceeding his mandate from the 27 EU member states.

"He has been constantly reminded by the council [of ministers] of the parameters of his mandate which includes the Common Agriculture Polity, as reformed," she said.

"We are quite surprised given the numbers that are floating around - but which have not been approved by any council resolution - to see how he can be within his mandate. But he has the benefit of the doubt. It is for him to demonstrate he is within his mandate."

EU leaders have just adopted ambitious climate change targets: to reduce greenhouse gas emissions by 20 per cent from 1990 levels by 2020 and to derive 20 per cent of its energy from renewable sources by the same date.

But Lagarde downplayed the significance of calls from Chirac for some kind of border measure targeted at imports from countries which are not pulling their weight in the global effort against climate change.

"President Chirac is extremely committed to the environment cause and any tool, means or policies to try to reform the way we consume, the way we spoil the environment, the way we exploit finite resources in his view need to be explored."

The European Commission was exploring such measures, but with some scepticism as to how practical or realistic it was. These would be difficult to target, would have to comply with World Trade Organisation rules, and be decided by the Europeans together, Lagarde said.