WTO members urged to cut tariffs in trade talks

Heads of key negotiating committees in the troubled Doha round of trade talks yesterday challenged members of the World Trade…

Heads of key negotiating committees in the troubled Doha round of trade talks yesterday challenged members of the World Trade Organisation (WTO) to make hefty cuts in tariffs and subsidies.

Publishing draft agreements for the contentious agricultural and industrial goods talks, the negotiating committees said differences between member countries were not huge, but would require political commitment and courage to overcome.

"This document is intended to take everyone out of their comfort zones," said Crawford Falconer, the New Zealand WTO ambassador who chairs the farm negotiations. "That has to happen if we are ever to get an agreement."

The move follows the breakdown in acrimony of a meeting of the "group of four" core negotiating partners in Doha - the EU, US, Brazil and India - on June 21st. Brazil and India accused the US of failing to offer big enough cuts in farm subsidies, while the EU and US said the emerging markets were too defensive on industrial goods tariffs.

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Mr Falconer's draft implies cutting the ceiling for US trade-distorting agricultural subsidies to between $13 billion (€9.4 billion) and $16.4 billion from current limits of about $22 billion. This is above the $10-$11 billion demanded by Brazil and India, but below the $17 billion informally floated by the US in talks.

But it left largely open the politically charged issue of "special product" provisions, which permit developing countries to shield particular commodities from cuts in import tariffs. Such loopholes have been targeted by US farmers, who say they undercut liberalisation.

The draft industrial goods agreement, written by Don Stephenson, the Canadian WTO ambassador, said developing countries should put a ceiling of 19-23 per cent on their tariffs, a range well below the 30 per cent the Brazilians and Indians were demanded in the G4 meeting, but around near the level that European business organisations groups say is needed to give real access to their exporters.

Leading partners in the talks, including the EU and US, reacted cautiously to the proposals, but did not reject them out of hand.

Spokesmen for the EU trade and agriculture commissioners 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."

There remains broad scepticism among trade officials that any agreement is likely to come soon.