WTO chief says trade round risks failure

Pascal Lamy

GENEVA - World Trade Organisation chief Pascal Lamy has said the WTO's struggling round of free trade negotiations risked collapse without a breakthrough soon.

In a television interview ahead of a trade ministers' meeting next week, Lamy said both developed and leading developing states must make concessions for a deal to be done in the core areas of agricultural and industrial goods.

The United States must move on farm subsidies, the European Union on farm tariffs and leading developed countries on industrial duties, he said.

"If a deal on this key triangle of issues is not there soon, there is a risk that this whole round will fail," Lamy told the BBC's Hardtalk in an interview.

Ministers from some 50 countries, around one-third of the WTO membership, will attend talks in Geneva starting on June 29 to try to hammer out a draft pact covering agriculture and manufacturing.

Without a deal, diplomats say the WTO could run out of time to complete the Doha round, which includes services and special trade help for poor countries, by the end of the year.

"We need big political decisions to be taken now," Lamy said.

But Washington and Brussels insist it is up to the other to move first, while bigger developing countries such as Brazil and India say only when there is progress in agriculture can there be movement in industrial goods.

In a speech in London on Friday, EU trade chief Peter Mandelson said he was encouraged by President George W. Bush's reaffirming his support this week for the global trade talks.

But he said the United States must come forward with a new offer to unblock the negotiations.

"I applaud the desire of the United States to press for the most ambitious possible outcome to this round. But you cannot get that simply by pushing others to move," he said.

In Washington, his US counterpart Susan Schwab, was equally adamant the United States had already made an "ambitious" offer to slash farm subsidies and there was nothing more it could do without Brussels biting the bullet on tariffs.

"We have a very generous offer that was introduced in October. It involves a great deal of ambition and we are still waiting for our trading partners -- the EU, Japan, the advanced developing countries -- to match (it)," she told reporters.

The round was launched in 2001 to boost the world's economy and help poor countries. But it is two years behind schedule and Mandelson said the costs of failure would be "truly enormous".

Lamy, a former EU trade commissioner, said he still believed a deal was possible, though he did not know if it would be achieved next week. "I do not think anyone knows. But I believe it is doable. I believe it necessary," he said.

Diplomats say the bottom line for next week's talks is enough progress on the triangle of issues to allow for a fresh attempt at a draft farm and industrial goods deal in July.

Even this would leave little time for the other areas and the technical work needed to turn a blueprint into a final treaty.

The WTO must complete the round by the end of the year because special US presidential powers to negotiate on trade will expire next year and Congress looks unlikely to renew them.

- REUTERS