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Doha- G-4 Recap
The Financial Times reported yesterday that, “India and Brazil’s fear of growing Chinese imports was behind their decision to help prompt the collapse on Thursday of the G4 trade talks in Potsdam, said Susan Schwab, the US trade representative, in an interview with the FT.
“Ms Schwab, who now faces a steeper uphill climb to persuade the US Congress to renew the Bush administration’s fast-track trade negotiating authority [or trade promotion authority (TPA)], which expires next week, said she was also surprised by India and Brazil’s ‘rigid’ negotiating positions.”
(For more on the potential impact the G4 collapse will have on Congressional renewal of TPA, see this article by Reuters writer Missy Ryan, which noted that, “The Bush administration is billing the collapse of world trade talks this week as good news for its drive to renew negotiating powers in Congress, but it is not clear that U.S. lawmakers will see things that way… ‘By walking away from a bad deal, we are once again able to show the Congress that we can be trusted,’ U.S. Trade Representative Susan Schwab said on Thursday after U.S., European, Brazilian, and Indian negotiators abandoned talks in the troubled Doha round of trade negotiations”).
USTR Susan Schwab and USDA Secretary Mike Johanns at a Press Conference yesterday in Geneva.
The FT article added that, “Ms Schwab said that the process by which Brazil and India reached a common negotiating position with other developing countries at their various groupings – G20 and G33 in particular – also deprived [Kamal Nath of India] and [Ceslo Amorim of Brazil] of the flexibility to adapt their offers.
“‘What you have seen is they spend huge amounts of time and political capital fighting it out internally and then they preclude their leaders [Brazil and India] from taking different positions – at Potsdam, Brazil and India were taking the same positions as they had almost two years ago.’
“Ms Schwab hinted that both countries had still not figured out how to provide leadership to the developing world. ‘It is a very different negotiating dynamic to be in the inner circle and to be in a leadership position,’ she said. She reserved her toughest words for India, which walked out of the talks and – according to some accounts – approached the negotiations with the expectation they would fail.”
To listen to comments by U.S. Secretary of Agriculture Mike Johanns from Thursday regarding Brazil and India, just click here (MP3- about one minute). This clip also features comments about the future of the Doha round from Ambassador Schwab. This audio clip from Thursday (MP3- about 45 seconds) also included comments from Sec. Johanns on Brazil and India’s perceived posture at the G4 talks.
For additional comments by Sec. Johanns from Thursday on the G4 talks, just click here (MP3- about 30 seconds).
Yesterday, Amb. Schwab and Sec. Johanns held a press conference regarding the G4 meetings and the Doha round at the WTO headquarters in Geneva. A transcript of their briefing is available here, while an audio copy of the press conference can be found here (MP3).
The Associated Press reported yesterday that, “The Indian trade minister blamed the U.S. on Friday for the collapse of a meeting of the World Trade Organization’s four most powerful members, saying that the U.S. refusal to cut subsidies to American farmers was unfair to developing nations.
“Indian Trade Minister Kamal Nath called the billions of dollars the U.S. government pays to its farmers a trade distortion that threatens the livelihood of India’s farmers and hinders the development of the country’s economy.
“‘It’s very unfortunate that demands of developed countries are completely unreal, are not fair, are not equitable,’ he said. ‘Developed countries must remove distortion. That is the most important thing.’”
The AP story pointed out that, “Critics of the subsidies say they unfairly decrease international prices, making it impossible for poorer nations to sell agricultural produce abroad.”
Dow Jones writer Kenneth Rapoza reported yesterday that, “Brazil’s Agriculture Ministry Friday said it is not pleased with the outcome of trade talks with the U.S., Europe and India this week, but that Brazil’s farm exports remain unfazed by the impasse.
“Authorities from the U.S. and Europe, on one side, met with Brazilian and Indian authorities on the other. Both sides blame the other for the impasse in World Trade Organization talks. The European Union and U.S. also continue to lock horns with each other on farm subsidies.”
Mr. Rapoza noted that, “Speaking in Geneva Friday, Foreign Affairs Minister Celso Amorim told the local Estado newspaper that ‘Brazil will continue exporting more and more.’
“‘We need the WTO because we need clear trade rules, because we need farm subsidies to end. We will still work on opening new markets, but I know for sure our exports will continue growing,’ he told the newspaper.”
And Dow Jones writers Tom Murphy and Wailin Wong reported yesterday that, “At the crux of the negotiations was the desire by countries like Brazil to cut agricultural subsidies versus the insistence of countries like the U.S. for more market access for industrial goods and services.
“In the absence of progress on the Doha Round, Brazil could seek bilateral trade liberalization agreements such as those pursued by South American neighbors like Colombia. The Andean nation has signed a free trade agreement with the U.S., though it’s still pending congressional ratification.”
Meanwhile, Kyodo News reported today that, “Japan wants to host a meeting with developing Pacific Rim economies in early July in an effort to narrow gaps in positions on trade liberalization between the industrialized and developing worlds, Economy, Trade and Industry Minister Akira Amari said Friday.
“Amari floated the plan a day after a crucial meeting in Germany involving four influential economies collapsed, making it increasingly unlikely that the World Trade Organization will successfully conclude the Doha Round of talks by the yearend deadline.
“In an effort to move the process forward, Amari said he is considering convening the meeting when Pacific Rim nations gather July 5-6 in Cairns, Australia, for a trade ministerial meeting of the Asia-Pacific Economic Cooperation forum.
“‘There is no player to bridge (differing views) between industrialized nations and developing countries,’ he said at a news conference. ‘I think Japan should be such a player, and Japan would like to play such a role.’”
And British Prime Minister Tony Blair has also been active in the wake of the G4 collapse. Dow Jones writer Gerald Jeffris reported yesterday that, “Outgoing U.K. Prime Minister Tony Blair called Brazilian President Luiz Inacio Lula da Silva Friday to urge a strong last-ditch effort to save the Doha round of World Trade Organization talks from possible failure, Brazil presidential spokesman Marcelo Baumbach said.
“In a 20-minute phone call, Blair reportedly told Lula that the next 48 hours would be decisive for the success of the talks and requested that the Brazilian president intercede in favor of agreement.”
Mr. Jeffris added that, “During Friday’s conversation, Blair reportedly urged Lula to accept a reduction in industrial import tariffs to an average of 12.7% from 35%. Brazil has offered to accept a reduction to 16%.”
Eoin Callan, in an article published in today’s Financial Times, flushed out more details on the issue of China as an overarching theme in the Doha talks.
“A fifth country, which was not represented in the Doha negotiating room, appears to have loomed large over the talks. The rise of China as an export superpower since talks began six years ago has heightened anxiety among developing countries about manufacturing competition.
“Susan Schwab, the US trade representative, said the talks ‘started out pretty well, with the EU and the US making progress on our agricultural differences. Then we got to manufacturing and all of a sudden we are on a different plane’”.
The FT article indicated that, “The emergence of Chinese export competition as a key stumbling block is ominous for the future of the trade round. Unlike the domestic political vagaries that have hobbled the talks in the past, there is nothing transient about the rise of China.”
Keith Good
