WTO chief says trade deal unreachable by end of this year

By BRADLEY S. KLAPPER

Associated Press Writer

GENEVA (AP)--The WTO will fail in its long-standing goal of reaching a trade liberalization pact by the end of this year, the organization's top official said Monday.

"We will certainly not conclude the round this year," Pascal Lamy, director-general of the World Trade Organization, told reporters. The five-year-old Doha round of trade talks were suspended Monday after top commercial powers failed to agree on steps toward liberalizing trade in farm and manufactured goods.

"We are in dire straits," Lamy added, offering no timetable for the resumption of the round, which is already two years behind schedule.

The two days of meetings had been called by Lamy with ministers from Australia, Brazil, the 25-nation European Union, India, Japan and the United States to try to re-energize the talks.

Indian Trade Minister Kamal Nath said "it could take anywhere from months to years," to restart the negotiations. "This is a serious setback, a major setback," said Brazilian Foreign Minister Celso Amorim.

EU trade chief Peter Mandelson blamed the failure on the United States.

"The United States judged that it would be better for the process to be discontinued at this stage," he said. "This action has led to the round being suspended."

But U.S. officials said the fault lay with other countries.

"Unfortunately things became clear yesterday that 'Doha light' seems still to be the preferred option of some of the participants," U.S. Trade Representative Susan Schwab told reporters.

Leaders of the Group of Eight major industrialized countries reaffirmed their commitment to the talks at their summit in Russia last week, but that did not translate into real negotiating action as officials said Sunday's meeting failed to generate the new movement hoped for after the pledges of support from the world's most powerful presidents and prime ministers.

U.S. Agriculture Secretary Mike Johanns said the proposed steps forward from other countries "appeared to be getting lighter and lighter in the last few weeks."

"Today truly represents a failure," Johanns said.

He blamed Brazil and India for being inflexible on their refusal to cut barriers to industrial imports and the EU for refusing to open up its farm markets.

"There was just simply nothing there," Johanns said.

Johanns said the United States indicated it could increase its offer to cut subsidies to American farmers, but he would not say whether the U.S. team had made a concrete proposal.

"The U.S. was unwilling to accept or indeed to acknowledge the flexibilities being showed by others in the room and as a result felt unable to show any flexibility on the issue of farm subsidies," Mandelson said.

Mandelson stressed his "profound disappointment" with the result and noted that a stall in the talks would threaten previous agreements that were painstakingly reached too help the world's poorest countries.

"This was neither desirable nor inevitable. It could so easily have been avoided," he said.

The complex trade talks aim to boost the global economy and lift millions out of poverty worldwide by lowering trade barriers across all sectors, with particular emphasis on clearing obstacles to increased exports from developing countries.

But the Doha round has stalled because of differences between rich and poor countries, as well as between the EU and the U.S. The Doha negotiations are named for the Qatari capital where they were launched in 2001.

Most countries have been sticking rigidly to the same positions they have maintained for months.

The entire process is rapidly running out of time because U.S. President George W. Bush's authority to "fast track" the trade deal--enabling U.S. envoys to negotiate an agreement that can be submitted to Congress for a yea-or-nay vote without amendments--runs out in mid-2007.

Date: 7/26/06

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