US Trade Representative Susan Schwab's trip to Southeast Asia and China later this month could signal the start of an international effort to get world trade talks back on track, analysts said on Friday.
"I think there needs to be a co-ordinated approach and that's what she is trying to do now," said Jeffrey Schott, a senior fellow at the Institute for International Economics.
But few expect the nearly 5-year-old talks, which were suspended last month after countries again failed to agree on how deeply to cut agricultural and manufacturing tariffs, to show serious signs of life soon.
The United States first needs "to give a clear political signal that TPA (trade promotion authority) will be extended," Schott said. "If you don't get that signal, which is unlikely to come before the November election, then other countries are going to be much more cautious in putting forward new offers ... that would help the negotiations get back on track."
Trade promotion authority, which allows the White House to negotiate trade deals that can not be changed by Congress, expires next year. It has long been considered essential for WTO talks to occur. A big battle is expected for renewal, with Democrats who hope to capture Congress in November likely to insist on terms the White House could strongly oppose.
President George W. Bush, after meeting with senior members of his economic team on Friday, said the United States would continue to push for open markets but he passed up the opportunity to urge Congress to quickly renew TPA.
That could reflect White House thinking it needs at least the outline of a successful world trade deal before it stands a chance of persuading lawmakers to renew the negotiating authority, said Daniel Griswold, director of the Cato Institute's Center for Trade Policy Studies.
With the odds very slim that will happen soon, "trade promotion authority in all likelihood is going to expire in the middle of 2007," Griswold said. Meanwhile, analysts offer different explanations for why a US offer last year to cut trade-distorting farm subsidies by 60 percent did not persuade others to do more to reach a deal.
The offer appeared to knock the European Union "off the table" by asking for bigger farm tariff cuts than Brussels could make, said Robert Cassidy, former US negotiator who now works for the law firm of Kelly Drye Collier Shannon.
"Sometimes that occurs and then you're in trouble because if the other side concludes there's no way they can negotiate a deal, then they begin to negotiate failure," Cassidy said.
But while the US offer last October was a big step forward from its previously "very defensive position," Washington needed to go even further last month if it wanted to bring the talks to a close, Schott said,
"What was needed in July was catalyst for the end game negotiations and that wasn't going to happen by holding their cards close to your vest," Schott said. But in that regard, the EU, Brazil, India, China and others share the blame, he said.
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