Warning: It's now or never for Doha

By BRIAN FALLOW

The world risks being carved up into trading blocs if this month's deadline to revive the Doha Round of world trade talks is missed, Singapore's Trade Minister George Yeo warned yesterday.

Officials in Geneva are in intense negotiations to draw up a framework for an agreement on agriculture, the centrepiece of the Doha Round, which was derailed at Cancun, Mexico last year.

The negotiations will come to a crunch at the end of this month when trade ministers gather to try to get the round back on track.

New Zealand Trade Minister Jim Sutton also sounded a warning: "If we miss this deadline ... the chances of getting anything in the rest of this year, over the period of the United States presidential elections and the period when the European Union has a change of commissioners, would be minimal.

"By the time the new players were up and the US Government had a rollover of its trade promotion authority from the Congress, we would be looking at the second half of next year."

Renewing the trade promotion authority, which allows the US Administration to negotiate trade deals without the risk that they will be taken apart by Congress, would be difficult if no progress was made.

"So this is a real deadline we need to meet if we want a good chance of completing the Doha Round successfully," Sutton said.

Yeo said the negotiations were "touch and go".

"If we fail the consequences are enormous. Doha will be set back by at least two years, probably more. There will be much less faith in the multilateral system.

"Countries will make alternative arrangements and I have an uneasy feeling that if we are unable to put the round back on track at the end of this month, the world will take a different turning."

Regional arrangements would become more important, Yeo said. "Everybody will say, 'Look, let's negotiate agreements with our relatives and our friends'.

"The world will be carved up into blocs and, for small countries like New Zealand and Singapore, that is an inferior world.

"We are much better off in the multilateral system which is rules-based and rules-bound."

Yeo was in Wellington for the second ministerial review of the New Zealand Singapore Closer Economic Partnership, which came into force in 2001.

"Three years ago there were 97 New Zealand companies incorporated in Singapore," said Sutton.

"Now there are 135, including large businesses specialising in high-growth areas such as engineering consultancy, travel, technology and IT.

"Many of these companies value the Singaporean connection not only for its own sake, but as a bridgehead for operations further into Asia."

The main point of the partnership was strategic, Sutton said.

The Government wanted to make sure New Zealand was not excluded from future trading blocs.

Green MP Rod Donald said that since the agreement took effect New Zealand's exports to Singapore had declined and the trade gap in Singapore's favour had widened.

But Sutton said there had been few barriers to trade in goods between the two countries before the agreement. Ties in services, trade and investment had strengthened.

In any case, he said, the New Zealand dollar had appreciated strongly over the past three years, reducing the value of exports generally.

The figures were also affected by higher world oil prices - Singapore is a major source of refined fuels for New Zealand.