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Big conflicts remain as trade pact goes back on table

GENEVA -- Government ministers from around the globe gather this week at the World Trade Organization for an 11th-hour attempt at a treaty they hope will provide a massive boost to the world economy.

They face huge differences of opinion, however, especially in the key area of agriculture, where rich and poor nations have vastly different agendas and exporters and importers have conflicting priorities.

''At a time when protectionist pressures lie just below the surface, when people across the world are demanding change, the 147 member governments of the WTO must deliver," said the WTO's director-general, Supachai Panitchpakdi.

Negotiators were meeting privately night and day to try to find an agreement before the July 31 deadline. Formal meetings start tomorrow.

The framework should have been completed in September at a ministerial meeting in Cancun, Mexico, which collapsed without agreement. Negotiators then planned to do it by Christmas -- but that deadline came and went.

If negotiators fail to reach a deal by the end of July, they realize the US presidential election and government changes in other countries will leave them paralyzed until at least next year.

The treaty framework will form the structure of continued negotiations in the current round of trade talks. Though it is only part of the process, many believe this agreement is the crucial one and that the rest of the talks will be much smoother.

Along with Shotaro Oshima, the Japanese ambassador who heads the WTO's ruling General Council, Supachai on July 16 produced a 15-page proposal on the structure of a future treaty.

On the key issue of agriculture, the document sets out a system ensuring that high import tariffs would be cut by a larger percentage than low ones -- a key demand of many agricultural exporters.

However, it also leaves room for nations to make smaller cuts on products they consider ''sensitive" -- often, products that are important in their domestic farming industry.

The document is short on details, saying simply that the exact formula to be used ''remains under negotiation."

The proposal says all agricultural export subsidies will be eliminated by a date ''to be agreed," a concession made by the European Union, which had originally refused to accept total elimination of the payments.

At the same time, the United States, Canada, and others must get rid of their own programs of support for agricultural exporters, it says.

The proposal was mostly welcomed, but some countries -- notably a group of importers led by Switzerland and Japan -- still say they have big problems with the text. They submitted a set of amendments, but those likely will be unacceptable to other WTO members.

The British development charity Oxfam also attacked the proposal, saying it had been subject to ''considerable rich-country influence" and did not sufficiently consider the demands of poorer nations.

''Developing countries are being put in the untenable position of having to choose either to agree to a watered-down framework or accept the blame for the collapse of the talks," said Oxfam spokeswoman Celine Charveriat.

EU member France also has criticized the proposal and accused EU Trade Commissioner Pascal Lamy of giving too much ground over export subsidies.

One major breakthrough in recent days came when a group of African countries dropped their demands for separate negotiations on eliminating rich countries' subsidies on cotton they claim are destroying the livelihoods of African farmers.

They said they would agree to talk about cotton within the overall agricultural talks but only if specific deadlines are set for removing subsidies.

Other areas to be covered in the treaty include cutting barriers to trade in manufactured goods and service industries like telecommunications and banking, and harmonizing and simplifying customs procedures.

All WTO members agree in principle that cutting barriers to international trade, including import taxes and government subsidies, is good for the world economy. But uncontrolled trade liberalization could have devastating consequences for individual countries, and diplomats are fighting hard to protect their national interests.

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