EU: World trade deal is still possible

EU: World trade deal is still possible article image
The European Union has presented a plan to the World Trade Organisation (WTO) to help deadlocked countries find middle ground in the bid to negotiate a global free trade agreement. The plan could be the saviour of the Doha Development Round of trade negotiations, which has been in progress since 2001. 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."


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