Agence France Presse | September 1, 2003
US President George W. Bush's administration is already tempering expectations for progress at global trade talks in Mexico as deep divisions throw a January 1, 2005 deadline for final agreement into serious doubt, analysts say.
Instead of being a half-way point, the September 10-14 World Trade Organization talks in Cancun, Mexico, would be an "early way station" for a deal that is more likely to come in 2007, if at all, senior Washington-based trade analysts said.
Trade ministers set the deadline in November 2001 when they launched the agenda for the talks in the Qatari capital of Doha.
But negotiators now secretly realized the deadline was unrealistic as they failed to bridge chasms about how to topple trade barriers in sensitive but critical areas such as agriculture and services, and whether even to discuss issues such as investment, analysts said.
"Everyone is working against a stated deadline of the end of next year but I think in practice there is more and more realization that it is not going to end then," said Fred Bergsten, director of the Institute for International Economics.
"It is probably going to end in 2007," he said.
Negotiating authority for the US team, led by Trade Representative Robert Zoellick, would not expire until May 2007 -- widely considered the real deadline, Bergsten said.
Also, legislative timetables meant neither the United States nor Europe could realistically reform their hotly disputed agricultural policies until at least 2006, he said.
"Cancun is not really a midway point that tries to tee up a deal for an agreement in a little over a year. It is more an early way station that, to be sure, needs to keep things going."
Negotiators, rightly, would not admit it publicly, but there was growing consensus that the deadline was already dead, Bergsten said.
Deputy US Trade Representative Peter Allgheier, speaking to reporters after preparatory talks at the Geneva-based WTO last week, said the United States remained ambitious.
But "frankly, as you survey the various countries, the US is practically alone in being an advocate of high ambition across all aspects of trade," he added.
The "bottom line" goal for the United States in Cancun would be setting up frameworks for strong future negotiations, Allgheier said. But "we don't expect for people to agree on what we want the agreement to look like at the end," he said.
Allgheier was clearly trying to dampen expectations "because they are not making much progress with any of the main dimensions of the negotiations: with the service agreement, with agriculture, with investment," said Economic Policy Institute international economist Robert Scott.
Agriculture had driven a wedge between the negotiators, he said.
"You have the United States pushing big cuts in subsidies to agriculture and the Europeans and the Japanese being unwilling to go along. Then of course you have the developing world that believes that that is not the right way to go," he said.
The Cancun talks would likely result in a statement from the WTO General Council chairman Carlos Perez del Castillo calling for ministers to re-assemble soon, and reaffirming the January 1, 2005 deadline, Scott said.
"But I think that (deadline) is an overly optimistic forecast. I think that these continued differences of opinion are unlikely to be resolved at this point."
Negotiations could last as long as the previous major trade talks, the so-called Uruguay Round, which dragged on for nearly eight years, he said. It may even prove impossible to forge a deal under the format drawn up in Doha, he warned.
The most likely result in Cancun would be a statement to save face, he said.
"I think it is going to be a lot of attempting to posture without real progress being likely," Scott said.
Despite portraying itself as the free trade crusader, the United States would likely come under pressure itself at Cancun, analysts said.
US trading partners were angered by Bushs farm bill, which increased domestic agricultural subsidies by 70 percent over six years, giving an extra 4.8 billion dollars a year to the sector, and by its imposition of steep tariffs on steel imports to protect its crumbling domestic industry.
"There will certainly be some barbs at the US farm bill from developing countries," Bergsten said. And its steel tariffs were being cited as an example of the US abuse of WTO provisions allowing the imposition of anti-dumping or emergency "safeguard" measures to protect local industries from imports, he said.
The United States would be content if the Cancun talks resulted in modest progress and no disasters, analysts said.
"If there is a single big risk at Cancun it would be the developing countries walking out or throwing up their hands in disgust or exasperation that the rich countries are not doing enough to move things forward," Bergsten said.
WTO countries may have lowered that risk, however, by securing a deal Saturday on intellectual property protection that aims to make it easier for poor countries to import cheap generic drugs if they are unable to manufacture the medicines themselves.Agence France Presse:
