Wednesday, August 29, 2007

Trade talks to resume with agriculture

from The Gulf Times

Talks on forging a new world trade deal will resume in Geneva next week with a push on agriculture, where there is already widespread agreement, Indonesia’s trade minister said yesterday.

But disagreement among both developed and developing countries on proposals to boost trade in industrial goods means a draft deal there would need to be reworked before talks on that area can resume in earnest, Mari Pangestu said.

“We’re going to be negotiating agriculture first,” Pangestu, a respected economist and expert on trade and development, said.

The talks were launched in 2001 to stimulate the world economy through increased trade opportunities. But the complex negotiations have floundered because of unwillingness to cut subsidies and open up sensitive markets.

Diplomats and officials at the Geneva headquarters of the World Trade Organisation (WTO) will make another effort from next week to get the outlines of an agreement on the deal, known as the Doha Development Agenda because it aims to help developing countries export their way out of poverty.

Pangestu — who has led trade talks for the world’s fourth-most populous country, where two fifths of the workforce are employed in agriculture — said these talks would focus on farm goods for the first two weeks of September, industry in the second two, and other areas such as services the following month.

Trade ministers could then meet in Geneva in October to sign a deal if one is reached, she said.

Trade officials say the end of October is the deadline for a deal as negotiations would run into the heightened emotions of the US presidential election campaign after that.

Agriculture had been expected to be one of the most contentious areas of a deal, but the latest draft proposals avoid going into some specific details, allowing the WTO’s 151 members to agree on the principles.

Filling in these gaps would be left to officials after ministers agree a deal, and it could come into force in 2009.

The proposals on industry, by contrast, set out specific ranges for tariffs, prompting disquiet from developed countries and outright rejection from many developing ones.

The farm and industry talks are related, with developed countries seeking greater access for their manufactured goods in developing countries before they allow more access in their food markets to poorer countries.

Even in agriculture there are still some differences, Pangestu noted.
“The same issue is still there, which is the willingness of the US to come to the table with something more than they have already indicated,” she said.

Trade officials say Washington is waiting for more details on the sensitive and special products, where countries wish to continue to protect their markets, before making another move on its own farm policies.

In Indonesia’s case, the special products that it wants to control are rice, sugar, corn and soybeans, Pangestu said.

“We’re net importers of corn and soybeans so it’s more about managing the supply at home,” she said.

If a deal is struck, Pangestu said Indonesia would seek greater access for non-agricultural goods such as textiles, garments, footwear and wood products.
Southeast Asia’s biggest economy could also increase its markets for palm oil. But for other farm goods, a deal would be more about potential market access as Indonesia is not a net exporter of farm goods.

Indonesia has only one bilateral deal, with Japan. Otherwise it is working with its neighbours in the 10-member Association of South East Asian (Asean), which aims to have free trade agreements with all major countries in the region by 2012.

Failure to agree the Doha Round would force Indonesia to rely more on bilateral and regional trade deals, she said.

“For small countries and developing countries this would stretch our negotiation resources,” she said. – Reuters

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