An outbreak of acrimonious finger-pointing between the EU and the United States over who is to blame for the stalemate in global free trade negotiations has undercut hopes that talks in Davos today could succeed in breaking the impasse.
In a flurry of briefing and counter-briefing during the World Economic Forum’s annual meeting in the Swiss resort, Peter Mandelson, the EU Trade Commissioner, and Rob Portman, US Trade Representative, blamed each other’s negotiating stance for the continued deadlock in the trade round.
With just three months left until a delayed deadline for negotiators in the talks to clinch a deal to cut barriers to trade around the world, following a stop-gap agreement in Hong Kong in December, the discord between the two sides fuelled gloom over the chances of any progress - despite what both camps called a “constructive” discussion at a bilateral meeting yesterday.
Mr Mandelson said that the US and Brazil risked burying the trade round by pursuing their joint insistence that Europe must make further concessions to improve acces to EU markets for agricultural products before other trade blocs can put fresh offers on the table..
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In a forthright briefing with reporters, Mr Mandelson said; “It has got to the point now where it is self-defeating. It is driving this round into the ground.”
But Mr Portman said it would not be enough for the EU to give some ground on so-called “sensitive” products - farm goods which Brussels wants to shield from the steepest tariff cuts, to secure a deal.
“I don’t think we can meet the Doha (round) requirements without a formula for tariff reductions globally that creates new market access,” Mr Portman told reporters. “I don’t think you can do that with just sensitive products.”
The EU wants to designate up to 8 per cent of its farm market as sensitive - but critics say that this could cover most of the goods of interest to exporters, such as beef, diary and sugar.
Mr Portman, Mr Mandelson and trade ministers from about 20 other countries are due to meet on Friday and Saturday on the sidelines of the forum to try to hammer out a compromise that will allow the negotiations to make headway.
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But Mr Mandelson was emphatic in ruling out any further move by Brussels until advanced developing countries, such as Brazil and India, offer more on cuts in tariffs levied on imports of industrial goods, and on market access for Western services companies.
“China is not Chad and Brazil is not Benin. These are very different sorts of developing economies we are talking about,” he said.
Mr Portman stuck to Washington’s position that a new EU offer on agriculture was essential. “That would be a huge impetus to the progress of the talks,” he said, adding Washington was still open to concessions. “We are negotiating. We are trying to draw this to closure. We are not drawing lines in the sand and saying take it or leave it.”
Robert Zoellick, the US Deputy Secretary of State meanwhile sounded a warning in Davos that China risks provoking an international backlash from what some countries see as its unfair competitive practices.
“One of the concerns that I have is that if China doesn’t deal with this issue more effectively this will become a device in which the external environment responds to what they feel is unfair competition,” he said.
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