Brian Gardner's Blog

Anyone hoping that the trade ministers meeting in the margins of the Davos World Economic Forum would lead to an early regeneration of the Doha Round of trade talks is likely to be disappointed. While ministers of twenty three of the World Trade Organisation’s member countries did commit themselves to resuming the talks and to attempting to break the stalemate on agriculture, the obstacles to a trade liberalising agreement remain formidable.

Prime among them are the European Union’s likely retreat into a new phase of agricultural protectionism and a beleaguered Democrat United States’ Administration traditionally committed to the ‘protection of American jobs’. With EU farmers clamouring for increased market support, standstills on quota liberalisation and tougher import controls, the new farm commissioner designate Dacian Ciolos has made clear that he is not in favour of any further concessions in the trade round. “I will be tough in this area, where we have already made significant concessions and we cannot go further”, he told his EP acceptance hearing.

Attitudes are little more encouraging on the other side of the Atlantic. While clamouring for a new US export boom, President Obama has shown no great enthusiasm for an early kick-start to the trade talks. Only a second rank US official was sent to the Davos trade ministers’ gathering. Continuation of the traditional US position: ‘free trade in your markets, but not in mine’?

For the EU farm lobby, with its main subsidy income safely behind unassailable ‘green’ cover, the big fear is market dilution by cheap imports. The EU has an onerous list of so-called ‘sensitive products’ for which it wants extra protection against imports. Exporting countries needless to say, object to most of this. They are also opposed to the proposed ‘special safeguard mechanism’ (SSM), which would allow developing countries to temporarily raise tariffs in order to protect their farmers from import surges or sudden price falls.

In the non-agriculture sphere (non agricultural market access – NAMA) the major issue remains the size and type of tariff cuts which developing countries are prepared to make, as well as the reduction or elimination of non-tariff barriers. The exporting countries want improved access for principally chemicals, electrical appliances and industrial machinery, which they do not see happening on the basis of current proposals.

While some at the Davos gathering hoped that a planned review meeting in March would be at ministerial level, this is now unlikely. The chances of a 2010 settlement of the eight year’s of negotiation are now pretty slim.

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