Ei-iE

WTO Talks Falter at Year’s End

published 21 January 2009 updated 21 January 2009

World Trade Organization Director General Pascal Lamy was forced to call off plans for a mini-Ministerial meeting last month after key countries failed to bridge their differences.

The meeting of trade Ministers to finalize the framework of a deal was tentatively scheduled for December 17-19, but after consulting with delegations in Geneva, Lamy concluded there had been no movement in the intractable differences in the talks over agricultural and industrial subsidies and tariffs.

At an informal meeting of heads of delegations on December 12, Lamy admitted the decision to cancel the mini-Ministerial was a disappointment and “an economic setback, since it delays much-needed good economic news.” However, he emphasized there was too much risk in bringing ministers to Geneva at this time.

“In my view…calling Ministers to try to finalise modalities by the end of the year would be running an unacceptably high risk of failure which could damage not only the Round but also the WTO system as a whole,” Lamy stated.

David Robinson, EI’s consultant on international trade, says the decision to cancel the meeting also means that talks on liberalizing the trade in services, including education, under the GATS remain on hold.

“Following the failure of the July mini-Ministerial, GATS talks have been in limbo,” he said.

Robinson adds there is now little chance that a meeting of Ministers will be convened before U.S. President-elect Barack Obama takes office in late January, leaving Obama’s new trade team to take up the negotiations.

While the current United States Trade Representative Susan Schwab expressed disappointment over the suspension of the Ministerial, U.S. House Ways and Means Trade Subcommittee Chairman Sander Levin welcomed Lamy’s decision and said “a new Congress working with a new Administration will have the opportunity and challenge to look at these issues in seeking mutually beneficial solutions that have so far eluded years of negotiations.”

Meanwhile, President-elect Obama has nominated former Dallas Mayor Ron Kirk to the post of USTR.

Kirk, a former mayor of Dallas, is little known in the trade community. He is a supporter of the North American Free Trade Agreement, but his trade policy experience is virtually nonexistent.

Some labour unions in the U.S. have expressed concerns with Kirk’s nomination.

Becky Moeller, president of the Texas AFL-CIO, said “we have not been totally in sync with him on trade.”