The European Commission Director General for Trade Jean-Luc Demarty said that not all options and avenues for market access had been explored. “That is why we felt we should formulate ideas to stimulate further engagement. Gaps can close if the political will is there.”

The talks have stalled over conflict between developing and developed nations over market access and trade tariffs. China, India and Brazil all have developing country exemptions for market restrictions, which the US believes are no longer fair as these nations have huge export economies.

The EU’s plan aims to keep everyone happy by tailoring tariffs to different products, focusing on high tariffs for industrial goods including chemicals, machinery and electronics and zero tariffs in other areas.

US ambassador Michael Punke said the US was open to the idea. “We can’t know what the outcomes might be but we can certainly know very quickly whether or not it can catalyse negotiations.”

However, Punke noted the plan only dealt with industrial tariffs and didn’t propose a solution for conflict over agricultural tariffs. Nations dependent on agricultural exports including Australia want greater access to markets in the US and Europe, which are currently heavily subsidised to protect local industry.

There is hope the plan will reinvigorate the Doha round, which is flagging in spite of a self-imposed completion deadline of November 2011. However, many delegates hold little hope as months of US-China bilateral trade talks have gained little ground. The Chinese ambassador Yi Xiaozhun has criticised the mercantilism approach to the talks, saying the WTO member nations had lost sight of the idealist aim. “Negotiations seem to be diverting away from the development mandate and towards market access.”

WTO Director-General Pascal Lamy said the implications of failure would be serious. “Failure of the WTO to harness our growing economic interdependence in a cooperative manner risks a slow, silent weakening of the multilateral trading system in the longer term. With this, a loss of interest by political leaders in many quarters, an erosion of the rules-based multilateral trading system and a creeping return to the law of the jungle.”

“Our sense is there is not a lot of movement and there’s not much time—in fact, very little time—to go before we won’t be able to hit the 2011 deadline,” he said in an interview with ABC News on 20 March. The G20 Seoul Summit in 2010 set a deadline of November 2011 to conclude the decade-long World Trade Organisation (WTO) negotiations.

Emerson believes participating countries have been too focused on the costs of trade liberalisation. The current round of trade liberalisation talks began in Doha, Qatar in 2001 and has stalled repeatedly over conflict between developed and developing nations.

Developed economies led by the United States, the European Union and Japan are insisting emerging economies open up their markets, while developing nations including Brazil, China, India and South Africa are demanding a reduction on domestic agricultural subsidies in developed countries.

Emerson is concerned this should not become an insurmountable obstacle to reaching agreement. “All right, have a discussion about the price for success. But there should be a real discussion about the price of failure. The price of failure would mean a deterioration in our international trading rules.”

In a speech to the US Chamber of Commerce, Gillard told businessmen that the World Trade Organisation talks were extremely important. “The round simply must conclude this year. 2011 is our last and best hope to get this done.”

The Doha round stalled in November last year over unresolvable conflicts between agricultural exporters. Australia led a bloc of low-subsidy producers to push for the US and European Union to reconsider their generous farm subsidies, which place low-subsidy exporters at a disadvantage. But powerful farmers’ unions in the US and Europe lobbied against liberalisation. India and China were also immovable on the significant import duties they impose on farm products.

Gillard also used her meetings with Obama to discuss the Trans-Pacific Partnership Agreement, a developing free trade pact between nine countries along the Pacific rim.“The Trans-Pacific Partnership is another key economic opportunity. President Obama and I are committed to achieving a next generation trade and investment agreement,” Gillard said.

She said the agreement would provide a platform to liberalise trade across the region. “Indeed the Partnership could ultimately provide a pathway to a Free Trade Area of the Asia-Pacific region.”

The meeting, running from 26-30 January in Davos-Klosters, will be attended by politicians from the G20 and other key countries—including more than 30 heads of state and government, the chairs of the forum’s 72 Global Agenda Councils, chief executives of the forum’s member organisations and representatives from civil stakeholder groups.

“We need to take advantage of this window of opportunity in 2011 to finish the Doha Round and consolidate the defences built up against protectionism,” Emerson said in a media release.

With a view to generating political momentum to finalise the global trade agreement he will meet one-on-one with ministers and leaders, including US Trade Representative Ron Kirk, EU Trade Commissioner Karel de Gucht, Brazilian Foreign Minister Antonio Patriota, Us House Majority Leader Eric Cantor and World Trade Organisation Director General Pascal Lamy. He will also attend more informal meetings with other trade ministers.

“In November last year the talks held by G20 and APEC leaders demonstrated that there is a level of political will to conclude the WTO’s Doha Round,” Emerson said. “They provided clear direction that the Doha Round is in the end game and they handed the baton to trade ministers and negotiators.”

Speaking at an economic forum in Bahrain on Sunday, Lamy told his audience that “the Doha Round, at this moment of the crisis exiting, is a vitally needed and, to be frank, a very low cost global economic stimulus package”.

The director-general accused the US delegates of trying to finish these negotiations on their own terms, demanding even more US concessions than are already on the table. He called on US President Barack Obama to intervene in congress to limit the impact of competing congressional interests on the Doha talks.

The WTO Doha Round of talks began in 2001, focusing on reducing barriers to trade among developing nations. However, the talks have repeatedly stalled, with the USA and the European Union unwilling to reduce subsidies to their farmers; and developing countries, led by India and China, unwilling to lower trading tariffs.

The Doha Round was due to conclude in March, following a pledge by G20 member nations last year to complete negotiations, however, despite international efforts, negotiations appear to have once again reached an impasse.

Failure to conclude this round favourably could cost the recovering global economy US$300-400 billion, Lamy warned.

In his report the the General Council of the WTO in early May, Lamy proposed a “cocktail approach” to solving the current stalemate in the Doha round. The ingredients in the cocktail solution included a personal consultation for each delegation with the director general, meetings between chairs of different negotiating groups and preliminary contacts between trade ministers to kickstart proceedings.

Lamy summarised: “We have the blender, we know which are the ingredients, it is just about time we start shaking them to be able to serve the cocktail before the ice melts!”

In his view, a favourable end to the proceedings would see EU and US agricultural subsidies slashed by 80 percent to improve the access of developing nations to European markets.

Stalled since last year, the Doha Round talks stumbled over issues such as agriculture and tightened on the division between developed and emerging nations.

Punke said the three advanced emerging economies of China, India and Brazil needed to open “to the degree that is commensurate with the benefit they have gained from participating in the global economy”.

“If we are going to overcome the difficulties, we have to have real negotiation. And there’s no shortcut to that,” said Punke. “Do I think that the negotiations that we face will be difficult? Absolutely. Do I think we can achieve success in those negotiations? Yes, if everyone is engaged.”

His presence in Geneva, the next site of the trade negotiations, buoys hopes that the US is committed to a world treaty. However, he criticised the unevenness of the talks, indicating: “I have the full authority to negotiate, but what I hear from some of my counterparts is that they do not have that authority.”

Lamy indicated the final 20 percent would be about ironing out differences in agriculture and making trade between rich and poor nations fair and equitable.

“That probably has to do with what remains to be done with tariff reductions on industrial goods, and in some cases on agricultural goods, notably with the safeguard with developing countries,” he said. “My own sense is that is where the focus should be now.”

Lamy, visiting Australia this week, praised Minister for Trade Simon Crean for his campaign against protectionism, and enthusiasm for the positive effects of trade.

He also remarked that US President Barack Obama’s recent State of the Union address had a “positive tone on trade” despite a “difficult domestic political situation”.

Crean said the deals on bananas and tropical products would generate much-needed momentum towards concluding the Doha Round in 2010.

“This demonstrates that with goodwill countries both large and small can get together in the World Trade Organisation (WTO) to solve their commercial disagreements,” he said.

The dispute on bananas, which was lodged with the WTO in 1993, was resolved last week in Geneva. The agreement to cut EU import tariffs was agreed to between the European Union, the USA, and banana-producing countries in Latin America, Africa, the Caribbean and the Pacific.

“This breakthrough on bananas is good for farmers in small developing countries, good for consumers, good for international trade, and good for the WTO and multilateralism,” Crean said.

The related agreement on tropical product EU import tariff cuts could also prove to be lucrative for Australia, Crean explained.

The complete list of tropical products has yet to be finalised for each market, but it could include important Australian exports such as canola oil, citrus fruits, avocadoes, and nuts such as macadamias and almonds.

“While the purpose of this WTO Ministerial meeting was not to hold detailed Doha negotiations, Ministers have committed to meet again early next year, to enable us to conclude the Round in 2010,” he reported. However, he said there needed to be more than a stock take of progress, urging “genuine engagement”.

“Concluding the Round is the best way to provide global economic stimulus and important additional insurance against trade protectionism,” he said.

One of the topics up for discussion was the global mobilisation of emerging economies. Crean emphasised the importance of aid-for-trade to assist developing nations particpate in the global economy.

“Trade liberalisation is not enough for developing countries in itself. Capacity building is an essential link for developing countries, a key aspect of the work that we do in market liberalisation,” he added.

While the Rudd government supports multilateral deals such as the Doha Round, Australia’s focus on bilateral and regional trade and investment has resulted in six Free Trade Agreements (FTAs) and the negotiation of seven others.

The Productivity Commission study will examine the effectiveness of trade agreements in responding to national and global economic and trade developments and in contributing to efforts to boost Australia’s engagement in the region and evolving regional economic architecture.

To register an interest in the study, or for further information, please visit the Productivity Commission website.