US manufacturers urged Brazil, India, China and other major developing countries on Friday to agree to eliminate tariffs in key industrial sectors to help reach a deal in long-running world trade talks.
"The key to whether the Doha Round succeeds in truth lies in sectoral trade agreements that would seek to eliminate tariffs in key sectors," John Engler, president of the National Association of Manufacturers, said in a statement.
World Trade Organization Director General Pascal Lamy has called key players in the nearly seven-year-old Doha round to Geneva the week of July 20 to finally make decisions on a number of vexing issues in the talks. Trade ministers will be asked to agree on how much major developed nations like the United States, the European Union and Japan are to cut their farm subsidies.
They will also face decisions on how much to cut farm tariffs, and the number of agricultural products that both rich and poor countries can protect from any cuts by providing imports quotas for foreign suppliers. The chairmen of both the agriculture and manufactured goods negotiating groups issued new texts of a proposed deal on Thursday that highlight the areas still to be decided.
"The latest revision shows little change, and reflects the deep divides that still remain," Engler said. A major issue in the manufactured goods negotiations is the difference between how much developed and advanced developing countries would be required to cut their tariffs.
The United States and the European Union complain the proposed tariff-cutting formula for countries such as China, India and Brazil would not provide new export opportunities. They also have been worried major developing countries could use certain "flexibilities" to exclude entire sectors, such as autos, from any market openings. US manufacturers are pinning their hopes for the round on an ambitious set of sectoral agreements where a critical mass of countries would agree to cut tariffs to zero.
"Willingness on the part of major advanced developing countries such as Brazil, China, and India to participate in sectoral agreements will be the litmus test for whether the upcoming WTO Ministerial can produce an agreement on 'negotiating modalities' that can really work," Engler said. Priority sectors for the United States include industrial machinery, electrical and electronic goods, wood and paper, chemicals and environmental goods, NAM officials said.
Even if a breakthrough is reached this month in Geneva, it is expected to take many more months of negotiation before a final deal is reached. At the same time, a failure at the upcoming meeting could put the round on ice for years if not mortally wound it.