After Asia-Pacific call for global trade talks, it’s time for action

By Martin Abbugao, AFP

SYDNEY — Asia-Pacific leaders Sunday urgently appealed for global trade talks to conclude by the year’s end but experts said the real test would be the deals they were prepared to cut at negotiations in Geneva. Their statement at an Asia-Pacific summit could help inject some zest into the talks, they said.

But hard numbers on how far nations would go to reduce farm subsidies and ease market access for industrial goods, issues being discussed at World Trade Organization talks in Switzerland, remained the key to success, they added.

Leaders of the Asia-Pacific Economic Cooperation (APEC) pledged at the end of their annual summit in Sydney to “push hard for the progress necessary to ensure the Doha Round negotiations enter their final phase this year.”

Echoing a statement they made two years ago in Busan, South Korea, the leaders said the results of the talks should be “ambitious” and “balanced.”

They should also deliver real market access for agricultural and industrial goods and services, and cuts in agricultural subsidies, the leaders said.

But a senior Southeast Asian trade official said the politicians must put their money where their mouths are, and that the United States, the world’s biggest economy, should make the first significant move.

“Everybody knows that the greatest obstructionists to the round are the Americans themselves,” the official told AFP on condition of anonymity.

“The first move has to be given loud and clear by the United States. It is the biggest single subsidizer of farm production,” said the official, who is deeply involved in the Geneva trade negotiations.

He said the United States is under pressure by developing nations to peg subsidies to its farmers at US$12 billion a year, but Washington has signalled it wants US$17 billion.

“My assessment is that Europe and Japan are prepared to negotiate and to deal,” he said. The official, who also helped draft the leaders’ statement, said the only thing new in the document was that there is now a consensus on the text that will form the basis of negotiations on industrial goods and that everything else was a rehash.

“At least we are not fighting over the text on non-agricultural market access,” he said.

“This is a big movement, but whether or not it is sufficient to move the process forward, it primarily depends on the U.S. — if the U.S. is ready to move on agriculture and on domestic support.”

World Trade Organization chief Pascal Lamy, who attended the APEC meetings to marshal support for the WTO talks, said the negotiations were no longer at an impasse after they restarted in the Swiss capital on Sept. 3. Differences have narrowed and he hopes that if the “sleeves-up” spirit of the initial talks persist, a convergence of principles could be reached by November on the major issues of agriculture and industrial goods.

This would clear the way for discussions on 18 other areas.

But with elections ahead in the United States and in other WTO member states, it would be difficult to make concessions without considering their domestic implications on farmers and businesses, analysts have said.

Rich countries like the United States also have to contend with powerful farm lobbies.

“As a negotiator, I will always say there is nothing impossible,” the Southeast Asian official said. “But if you see in November that we are still stuck in mud, the round is dead.”

The Doha Round, which started in the Qatari capital in 2001, was primarily aimed at helping developing nations to take advantage of expanding global trade.

This can be done through cuts in farm subsidies that support the prices of rich country produce on world markets, and by easing access to agricultural markets in Europe and North America.

Indonesian Trade Minister Mari Pangestu defended developing nations for seeking provisions that would shield “special products” from competition to avoid large scale displacement of their farmers.

She said at a business forum held on the sidelines of APEC that in most developing countries, between 30 and 80 percent of the population is employed in agriculture, compared with 1-5 percent in developed countries.

Indonesia is seeking to classify rice as a special product because 60 percent of its farmers are employed in the sector, Pangestu said.

Australian Trade Minister Warren Truss warned there was a risk there would be so “many exceptions and special products and sensitive areas … that in reality we don’t deliver anything worthwhile.”