Schwab urges Doha talks review

The big emerging economies such as China, Brazil and India hold the key to success or failure of the long-running Doha round of global trade talks, Susan Schwab, the outgoing US trade representative, said on Wednesday.

The next few months, while the new Obama administration settles in, provided an opportunity “to step back, review where we are in the Doha round and to take some time to move it forward,” Ms Schwab told journalists in Geneva.

Last month Pascal Lamy, head of the World Trade Organisation, decided against calling ministers together in a bid to achieve an outline trade accord by the end of 2008, saying continuing wide differences on key issues made the risk of failure too great.

Ms Schwab said negotiators could usefully use the first half of 2009 to do the sort of detailed technical work that paved the way for progress after previous setbacks in the round, launched in Qatar in 2001.

But the real question concerned the contribution the rapidly growing emerging economies were prepared to make to reflect their expanding role in the global economy.

Some 80-100 poorer developing countries already enjoyed “virtually unlimited access” to rich-country markets, she said. Thus their future opportunities for trade growth, development and poverty alleviation depended on better access to emerging markets.

“There is a big difference between what we should expect of a Brazil, or China or India, and what we should expect of a Kenya, for example,” she said.

The main sticking point in December was a US demand that the more advanced developing countries agree to talks on eliminating tariffs for broad swathes of industry, including chemicals, electronics and industrial machinery.

Washington says these sectoral negotiations are needed in addition to an overall tariff-cutting formula that would reduce maximum permitted tariffs for industrial goods. It argues that the formula cuts would not be enough to bite into duties actually applied, so would not improve access of American manufacturers to these markets or generate new trade flows.

Some trade experts have suggested that reducing ceiling tariffs would in itself be a useful achievement, since it would give countries less “wiggle room” to raise tariffs without breaching WTO commitments.

But Ms Schwab said that in a round setting the framework for the global trading system for the next one or two decades “you really need to have more to show than the status quo.”

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