GENEVA — A flurry of high-level negotiations by the U.S., European Union, Brazil and India have revived hopes that a political breakthrough could be clinched this summer in the global trade talks on lowering tariffs and other barriers, including on textiles and apparel, senior diplomats and executives said here last week.
The officials said if the long-drawn-out negotiations should find resolution, it would pave the way for a global Doha deal by the end of 2007.
In pursuit of this objective, U.S. Trade Representative Susan Schwab is slated to hold a series of private talks today and Wednesday in Paris on the sidelines of the annual ministerial meeting of the Organization of Economic Cooperation & Development.
While in Paris, Schwab is also scheduled to take part in a session with trade ministers from a cross section of more than two dozen World Trade Organization nations, and then proceed to Brussels for talks on Thursday and Friday with her counterparts from the G4 group, which consists of the U.S., the EU, Brazil and India.
However, the officials said that if world leaders again fail to reach agreement on agricultural issues, which torpedoed the talks last summer, and no deal surfaces in July or early fall, chances are that the round of trade liberalization talks launched in November 2001 in Doha, Qatar, could drift into 2009 or beyond.
The deal would include so-called “modalities,” or terms that govern how nations would slash subsidies and tariffs for agricultural and industrial goods. If these terms could be agreed upon, envoys said it would also give the green light for nations to proceed in completing other segments of the talks covering trade in commercial services, rules such as antidumping and trade facilitation.
Peter Allgeier, deputy USTR, told reporters here Friday that within the next 50 days, “it’s possible to narrow the differences and to reach a convergence on the fundamental issues in agriculture, but obviously that depends on trading partners beyond the United States.”
The Doha talks were put back on track in late January following direct intervention by President Bush and other world leaders, with a special focus placed on the G4 group taking the lead in the search for a breakthrough.
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“I see a level of activity, engagement in the negotiations, unprecedented for some time now,” Pascal Lamy, WTO director-general, told reporters last week after a series of negotiating sessions. “I think there is narrowing of differences, although too slow a pace, given time constraints.”
Earlier, Lamy had told envoys, “A successful outcome to the round is possible, even in the small amount of time remaining until the end of this year.” But he also stressed that he has warned governments “that if they do not compromise soon, they will be forced to confront the unpleasant reality of failure.”
Asked about the pace of the G4 talks, Allgeier said, “I am confident that the G4 are going to be able to contribute to the multilateral process in a way that enables us to complete these negotiations by the end of the year.”
Senior trade diplomats and industry executives close to the G4 deliberations said some of the ideas explored are for rich nations to make deeper cuts in industrial tariffs and developing nations to be allowed more flexibility to lower their tariffs. They said among the scenarios floated in the private G4 talks are ways to deal with sensitive industries in developed nations such as textiles in the U.S. and electronics in the EU.
In the case of textiles, one solution might be to establish longer phase-in periods for some categories.
“Basically our position on the market access by developing countries in [nonagricultural market access] is very clear and that is we are looking to achieve…genuinely new market access, that is a change in the conditions of entry compared to what businesses find on the ground right now,” Allgeier said.
Trans-Atlantic textiles and apparel industry executives are of the view, however, that in their respective sectors, the industrial tariff talks will not deliver much in terms of new markets.
Cass Johnson, president of the National Council of Textile Organizations, said there’s still “a lot of concern” about what will happen when the China safeguards go off in 2008, referring to the ability to impose new quotas on Chinese exports.
He said the NCTO wants the U.S. “not to dramatically cut tariffs on sensitive textile and apparel products that affect yarn and fabrics exports.
“We want to make sure sensitive tariff lines are not cut that create preference buying of U.S. cloth,” he added. “Our primary concern is to defend our preference areas.”
U.S. and European executives are also apprehensive that emerging countries such as India will use the flexibilities allowed to developing countries under the NAMA talks to shield them from being substantially opened. Johnson said he thinks India will use the flexibility to protect its apparel industry.
“They will not touch those lines because they’re worried about China, so the market access opportunities would be limited,” Johnson said.
Other textile issues at play in the NAMA talks are efforts by some developing countries spearheaded by Turkey to secure special treatment for some textile products that would effectively allow tariffs to be maintained at high levels. The initiative is supported by Jordan, Honduras, Mauritius, Guatemala, El Salvador, the Dominican Republic and Bangladesh, but is strongly opposed by China, Pakistan, Vietnam, Hong Kong and the EU.
The poorest nations also want rich nations to provide duty free and quota-free access for more than the 97 percent of tariff lines for all goods.