ANALYSIS:Negotiations in pursuit of agreement on pulling down trade barriers are proving tortuous, writes Jamie Smyth
TALKS TO remove global trade barriers are delicately poised with ministers entering a second week of negotiations today over plans to slash tariffs and subsidies in a host of agricultural and industry sectors.
A compromise package presented by World Trade Organisation (WTO) director general Pascal Lamy rescued the talks from imminent collapse late on Friday when seven of the world's biggest trading blocs, agreed to use the plan as the basis for reaching a deal.
Several delegations, including the Irish contingent led by Tánaiste Mary Coughlan, were convinced the talks would break up after four days of fruitless negotiation. But Lamy's intervention, coupled with huge pressure exerted by Brussels and Washington, helped to push even sceptical developing states like India to consider the proposal and work towards an agreement.
The US and EU have been the cheerleaders for the Doha round of talks in the past week, arguing that the downturn in the world economy badly needs the fillip of a WTO deal. In his daily blog on the talks EU trade commissioner Peter Mandelson said yesterday the new trade created from the proposed cuts in tariffs in the compromise proposal would outstrip the result of the 1994 Uruguay deal. If he is correct this would give a huge boost to the economy as Uruguay added between $109 billion and $510 billion to global income.
As the Irish Farmer's Association (IFA) argue personal ambition is also a driving factor for Mandelson, who is expected to step down as EU trade negotiator next year and would be keen to leave a Doha deal as his legacy.
US president George Bush also wants a deal to divert attention from his Iraq policy while Lamy also wants a success before his own position comes up for renewal next year.
The big shift in momentum on Friday though was driven by a split in the position of the big developing countries with Brazil supporting the Lamy compromise while India remained much more sceptical.
"There is no agreement but there are certain areas of concerns, certain areas of consensus," said India's commerce and industry minister Kamal Nath after a five-hour meeting on the Lamy compromise proposal.
But India finally agreed to move ahead with the talks following last-ditch lobbying efforts by President Bush, who telephoned Indian prime minister Manmohan Singh to urge him to make concessions for Doha.
India, which has enjoyed strong economic growth in the last few years, is considered central to a global trade deal because it is a member of the G7 - the seven biggest trading states - and also represents the G33, which represents most of the big developing nations.
Nath has taken the most aggressive stance in the talks, even threatening to walk out at one stage, over concerns that the Lamy proposal does not enable India to adequately protect its agricultural or industrial sectors.
His tough stance has caused consternation among the US trade negotiating team and also among EU states, particularly Germany, which is concerned the compromise deal will enable India to shield its car industry from German imports. It remains to be seen if India can be encouraged to sign up to a deal that could provoke a negative political reaction at home from its farmers and domestic firms.
The Irish delegation, which at one point included four ministers, has expressed concerns about the Lamy proposals' impact on European agriculture, particularly the beef sector. But there is no question that the Government will follow the Irish farmers's advice to reject a compromise text later this week. Tánaiste Mary Coughlan has said no decision on a veto will be made until a final deal is agreed and then placed before all WTO members sometime later this year.
She has also said that the wider interests of the economy must be considered, particularly the benefits that a WTO deal would offer manufacturers and services firms. Services already account for more than 40 per cent of all Irish exports and that figure is growing rapidly.
Most EU states, including Germany, suport the Lamy compromise text with only France publicly attacking the proposal at the weekend. There is also a feeling among many EU delegrations that there is no reason to show their hand while serious problems remain in several strands of the talks.
For example a dispute over the EU's preferential tariff regime for banana imports from former colonies still remains deadlocked. There are also problems with the subsidies the US pays its cotton farmers and the EU is still insisting on legal copyright protection for food products which use place names in their title such as Parma ham. These issues remain to be resolved, so the talks will continue until Wednesday unless they collapse earlier."Tánaiste Mary Coughlan has said no decision on a veto will be made until a deal is agreed