[Free Trade] Brown calls for relaunch of global trade talks

from The Scotsman

LONDON (Reuters) - Chancellor Gordon Brown called on Wednesday for the International Monetary Fund's member states to reach agreement in Singapore this month on restarting global trade talks that collapsed earlier this year.

Brown, who chairs the IMF's main policy steering group, described the stalled talks as the most worrying setback for the world economy and wants the lender's new surveillance powers to focus on trade issues alongside current account imbalances.

"As chairman of the International Monetary and Financial Committee (IMFC), I have put progress on trade and a pro-globalisation agenda firmly at the heart of our meetings," Brown wrote in an article in Wednesday's Wall Street Journal.

"Once we can regain the momentum in Singapore, any breakthrough should be followed quickly by a push by heads of government for a trade agreement before the end of the year."

World Trade Organisation chief Pascal Lamy, whom Brown has invited to address the IMFC, suspended the so-called Doha round of talks in July after trade ministers failed to break a long-standing impasse over farm subsidies and tariffs.

The round has been billed as a once-in-a-generation chance to inject up to $300 billion (158.3 billion pounds) a year into the world economy and lift millions out of poverty.

"And this trade failure is helping give cover to the protectionist backlash that is seeing the growth of populism in Latin America, a resort to national champions in Europe and protectionist calls in the U.S.", Brown wrote.

He said that it was important to find common ground among the key players before the Singapore meetings and Britain's Trade Secretary Alistair Darling was starting these talks in Brazil this week.

He also called for a greater role for the IMF and said the Singapore meetings should consider measures that will make a new trade agreement more acceptable to the developing countries with specific aid for trade proposals.

"I will propose that the IMF consider how this year's surveillance processes could focus not just on current account imbalances -- its current work -- but also on promoting trade growth and financial stability," Brown wrote.

"With infrastructure in the developing world so poor, transport costs alone can be ten times the cost of tariffs and thus are a far bigger barrier to trade. In Singapore, the United Kingdom will offer to do more to support infrastructure."

But he said the biggest barrier remained agriculture in developed countries and that Europe should go beyond its initial offer of a 39 percent cut in agricultural tariffs and maybe even the 51 percent being mooted.

The U.S. should go beyond a 53 percent cut in support for its farmers while Brazil should offer more than its pledge to reduce tariffs on industrial goods to a maximum of 30 percent, with India responding on services, Brown wrote.

He also said he would, together with IMF managing director Rodrigo de Rato, chair a summit of business and financial leaders to discuss the importance of free trade.