Trade meeting appetiser before Geneva main course

By GREG ANSLEY Herald correspondent

SYDNEY - Tomorrow night the trade ministers of 25 of the world's most important trading nations - 40 if you count the separate countries represented by the European Union - will sit down to dinner in Sydney.

They will be an island in a storm, isolated in the Homebush Olympic Park from anti-globalisation protesters by high fences, armed police and the faceless anti-terrorism forces that have become de rigueur for all such gatherings since the September 11 attacks on the United States.

But the ministers, representing 80 per cent of international trade and roughly two-thirds from the developing world, will bring their own tempests with them in their briefcases.

Australian Trade Minister Mark Vaile arranged this "mini-ministerial" meeting as a way of finding some relatively informal route through the dense briar thicket of the World Trade Organisation's Doha Round of negotiations on further liberalisation of the global marketplace.

Around the conference table when the meeting gets under way on Friday will be WTO director-general Supachai Panitchpakdi, Vaile, New Zealand Trade Minister Jim Sutton and counterparts from North and South.

From the richest, the US, Canada, the European Union, Japan, South Korea and Switzerland; from the middle, China (Hong Kong has its own seat too), Thailand, Malaysia, Singapore, South Africa, Indonesia, Mexico, Brazil and India; and from the poorest, Colombia, Trinidad, Tobago, Egypt, Kenya, Nigeria, Lesotho and Senegal.

Vaile has being playing down the significance, casting the meeting as a means of developing a consensus on outstanding issues to help smooth the agenda for the main game in Geneva.

"There won't be a declaration at the end of this meeting saying, 'We have agreed to significantly reduce the level of agricultural subsidies across the world'," he said.

"This is not a meeting about outcomes ... It is about reconciling positions so that we can provide the political momentum for the process to move forward in Geneva."

There is good reason to tread softly in public: any whisper of backroom deals to present as a fait accompli to the more than 100 other countries not represented in Sydney would almost certainly guarantee their doom.

But there is urgency. Negotiators fear that if no substantial progress has been made by the mid-point of the round, to be marked by a ministerial conference in Cancun, Mexico, next September, the Doha process could face collapse.

There are tight timetables in the extremely sensitive areas of agriculture and services, and a December deadline for agreement on a new intellectual property regime to enable cheap drugs for HIV/Aids and other diseases to be provided to Third World nations.

And the ministers will be facing issues that have frustrated two generations of negotiators, but which have become increasingly pressing with the growth of world trade and the impatience and far louder voice of the developing world.

"There will be no round without the developing countries and there will be no round without agriculture," warned Sutton.

Nor are the points of division confined any more to squabbles between the rich and powerful, or between North and South: Europe's demands to link environmental and labour standards to trade are as divisive among the developing world as they are among the rich.

Negotiators are further faced with the need to accept the reality of trade, and of related areas such as intellectual property rights, as key tools of economic development.

In Sydney tomorrow the concerns will be given voice at a meeting between officials and non-governmental organisations concerned particularly that the WTO devise a formula to enable cheap Aids drugs to flow to the poor.

Oxfam in New Zealand has joined an alliance of international aid organisations warning that without plentiful supplies of generic drugs, tens of millions of people will die every year from Aids and other infectious diseases.

New Zealand, without its own pharmaceutical industry and no major demand of its own, has played a key role in brokering talks on generic Aids and other drugs for the poor, and is hopeful for movement in Sydney.

"If we can achieve a consensus of those present on a formula for resolving that issue than I think that will be important," Sutton said.

Wellington has also unilaterally offered tariff-free access to its markets for the world's 48 poorest countries, and has tabled a radical proposal in Geneva for a zero tariff for all non-agricultural goods, with a longer phase-in period for developing countries.

Sutton said unlike agriculture and services, no formal structure for industrial goods had been established under the earlier Uruguay Round and he was hoping to see the initiative gain traction in Sydney.

US Trade Representative Robert Zoellick, who pitched the Administration's WTO proposals to Congress last week, wants to discuss the proposal with Sutton at Olympic Park.

But huge battles loom in agriculture, where the EU has again canned reform of its farm subsidies and is gearing for a fight, Japan remains intransigent and the US is wielding its vast farm support programme as a cudgel to force reform.

The determination of New Zealand and the Cairns Group of fair trading nations to force a new deal on agriculture has been matched in the Third World, which sees open trade in farms goods as a key to its future.

Allied to this are Europe's demands for environmental and labour conditions to trade reform, which Sutton said must eventually be treated as a sweetener for any deals struck with Brussels.

And the rush of free trade agreements around the world, he said, could work either way - as an incentive for others to act, or as pacts excluding the rest from deals stitched up between the rich and the powerful.

"We don't acknowledge any prospect of failure," Sutton said. "At every stage we have to construct a scenario that has the aim of achieving a good outcome at the finish, and set about making it happen ... We start to put the pieces together at meetings like this."