Doha global trade round 'close to crisis'

Published in FT: April 28 2005 22:57 | Last updated: April 28 2005 22:57

Supachai Panitchpakdi, director general of the World Trade Organisation, on Thursday warned that the Doha round of global trade talks was 'close to a crisis'.

'I am not pushing the alarm button now, but my finger is hovering over it,' Mr Supachai told a meeting of the WTO's trade negotiations committee, which oversees the round. 'We do not seem to be making the progress we need.'

Without a rapid acceleration in the negotiations, the stage could be set for another failure at next December's ministerial conference in Hong Kong, he said. The Hong Kong meeting is due to approve a negotiating blueprint that could pave the way for completion of the round in 2006.

Negotiators in Geneva are struggling to come up with a draft of a ministerial agreement by the end of July in all the areas covered by the round. The aim of the round is to lower trade barriers for agricultural and industrial goods and services, but there are also talks on new WTO rules, for instance, on fishing subsidies and customs procedures.

Trade officials listed the main areas of concern as: agriculture, where disagreement over a supposedly technical issue was holding up tariff negotiations; services, where offers were too few and of low quality; and special treatment for developing countries, where talks had barely progressed over the past 18 months.

The long-running technical spat over how to convert agricultural tariffs to percentage equivalents has caused particular concern because it threatens to bring the farm trade talks, and the rest of the round, to ahalt.

'It is simply not credible that this issue could torpedo the round,' Mr Supachai said yesterday, urging the governments involved to find a solution urgently.

The European Union and other countries running highly protectionist agricultural policies have the most tariffs expressed as duties per weight or number that must be converted to ad valorem or percentage-of-value tariffs.

The way the conversion is done matters because it affects the size of tariff cuts they will have to make in any subsequent deal.

A compromise appeared close last week but this has since fallen apart amid recriminations. Another meeting has been scheduled for today before talks move to Paris before a meeting next week of more than 30 trade ministers on the fringes of the annual ministerial conference of the Organisation for Economic Co-operation and Development.

? The European Commission said on Thursday that Italy and Greece had joined France in asking the EU executive to take emergency action to curb a surge in imports of Chinese textiles and clothing, Reuters reports from Brussels.

Spain also said it was seeking immediate formal consultations with China on nine categories of textiles and clothing, a step that could lead to limits on shipments in 15 days if Beijing does not take action itself.