Trade negotiators are entering a critical period in their efforts to wrap up a new world trade agreement by the end of the year. At stake is a pact to boost trade and growth in a world economy buffeted by financial crisis, as markets open for businesses from food to finance in rich and poor countries.
But optimism at the start of the year that a deal could be done soon has faded, as the talks have bogged down in technical details and recriminations among rich and poor countries about who should show the greatest ambition in lowering barriers.
Meetings this week on central agriculture and industrial goods will determine whether World Trade Organisation (WTO) mediators can issue revised texts distilling the progress. Those negotiating texts, and a set of talks this week on the services sector, are intended to pave the way for a meeting of trade ministers who would agree the outlines of a deal. "The next two weeks will be crunch," said a senior diplomat from an export-oriented developing country.
BLAME GAME:
Negotiators for the Doha round talks, launched in 2001, have entrenched their positions, making little progress in narrowing the gaps over the past month as they review the latest revisions of the agriculture and industry drafts issued on February 8.
As a result, the hoped for meeting of ministers, flagged in January for around Easter, which falls this year on March 23, now looks likely to be in mid-April, if at all.
The ministers will take the final political decisions on the headline cuts in tariffs and subsidies, and much of the current negotiation focuses on exceptions that rich and poor countries want to protect politically sensitive industries or crops.
Rich countries like the United States say they cannot sell a deal at home involving cuts in farm subsidies if waivers for other states water down market access for their exporters.
But poor countries, pointing out the Doha round is supposed to help them in particular, complain they are being asked to do more than the rich. Big agricultural exporter Brazil says rich nations want to keep triple-digit tariffs on some farm products-and even 1,720 percent on one Japanese import.
It is not simply a rich-poor quarrel. Many developing states are also eyeing the prospects of greater trade between them, and rich food exporters like Canada or Australia would like a bigger share of food markets in the European Union or Japan.
But EU trade chief Peter Mandelson said last month the Doha talks faced a big risk of failure. David Woods, a trade analyst and former WTO spokesman, said the mood was grim.
Susan Schwab, the top US trade official, said on Wednesday it was up to advanced developing countries like India and Brazil to contribute and in return, the United States was ready to make a dramatic reduction in its trade-distorting farm subsidies. Schwab says President George W. Bush's administration is determined to conclude a deal this year before it leaves office.
But many countries doubt Bush's ability to sell a deal to Congress and are not putting all their cards on the table, Woods said. Protectionist rhetoric is also rising as Senators Barack Obama and Hillary Clinton fight for the Democratic nomination.
FOOD:
Agriculture, to be discussed on Monday, is key to the talks because of its significance for developing countries-not just exporters like Brazil, but also states where millions of very poor farmers make up the bulk of the population.
WTO mediator and New Zealand ambassador Crawford Falconer hopes to see progress on much delayed domestic consumption data that rich countries would use to calculate import quotas for certain "sensitive" products at the full tariff cut, in return for being able to shield the bulk of imports from lower tariffs.
A similar issue is the extent to which developing countries would shield products they designate as special from the full range of tariff cuts to protect their subsistence farmers. At meetings on industrial goods later in the week Canadian ambassador Don Stephenson, who chairs the talks, will be under pressure to revise proposals to link the size of tariff cuts by developing states with the extent of exemptions they opt for.