GENEVA — Reaction has been tepid to a proposal from the chairmen of the World Trade Organization’s agriculture and industrial goods segments on lowering subsidies and duties for agricultural products and industrial goods, a bid to advance the troubled Doha Round of global trade talks.
The plan, introduced this week by Don Stephenson, the Canadian chairman of the industrial market access talks, and Crawford Falconer, New Zealand’s chairman of the agriculture segment, came less than a month after negotiations among the U.S., European Union, Brazil and India collapsed during ministerial talks in Potsdam, Germany.
Stephenson’s draft on industrial tariffs extends the time frame for lowering U.S. duties on 16 sensitive textile and apparel categories from developing countries that benefit from preferential access to six years from four years. A similar phase-in is recommended for the EU on 23 tariff lines, including eight categories of textiles and apparel.
The delay by two years would benefit countries with preferential trade pacts with the U.S., such as Lesotho, Mauritius, Madagascar, Kenya and the Dominican Republic, and, in the case of the EU, nations such as Bangladesh and Cambodia.
Stephenson’s plan suggests a final duty rate for rich nations of about 8 to 9 percent, and for developing countries, between 19 and 23 percent. At the Potsdam talks, the EU and U.S. said they could live with an 18 percent maximum duty rate for developing nations, but the counteroffer by Brazil was 25 percent, along with demands for big cuts in farm subsidies by the U.S. and the EU.
Pascale Lamy, director general of the World Trade Organization, said the new texts constitute a “fair and reasonable basis for reaching ambitious, balanced agreements.”
“Members will not be fully satisfied with the texts,” Lamy said. “But what separates them today is smaller than what unites them.”
Stephenson told reporters the proposal is a starting point for negotiations and noted it is likely to be revised “one or more times,” and the final outcome “may look like this text, or it may not.”
“This deal is still doable and still within the members’ grasp if they want it,” Stephenson said.
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A spokesman for EU Trade Commissioner Peter Mandelson said, “Our first reaction is that the texts provide a basis for further work in the Doha Round, although there are points on which we have important concerns and other significant issues in the negotiations that are not included in these texts.”
A spokeswoman for U.S. Trade Representative Susan Schwab said, “The United States will participate actively and constructively in the upcoming consultations and negotiations over these texts, with the aim of ensuring that the revised texts define a clear path for an ambitious and balanced result that generates…new trade flows and market opportunities.”
Several diplomats said the industrial tariff plan was too aggressive, while the proposal to cut tariffs and subsidies for agriculture was too mild.
“I think there is an inherent imbalance between the agriculture and the [nonagricultural market access] text,” Brazil’s foreign minister, Celso Amorim, told reporters Thursday after talks with Lamy.
In the agriculture segment, Falconer came up with a plan that calls for U.S. farm subsidies to be capped at around $13 billion to $16.4 billion. The proposal also includes the ambitious demand by African cotton-producing nations Benin, Mali, Burkina Faso and Chad that cuts in domestic cotton subsidies be much deeper than for other farm products.
The WTO’s 151 member states are to give initial reactions next week to the two proposals, and in September, begin negotiations to try to hammer out a deal in the talks that launched in 2001 in Doha, Qatar.