Leaders of the major economies have called for a new global trade pact next year, but in Geneva negotiators say there is little prospect of a Doha deal until the United States signals clearly it is ready to move. The diplomatic calendar is filling up with meetings of heads of state and ministers who will have the opportunity to renew pledges to conclude a world trade deal and fight protectionism. The G8 rich nations and biggest emerging economies agreed at their summit last week in Italy to conclude the World Trade Organisation's long-running Doha round in 2010 to help revive the world economy. In a series of meetings in recent months, new US Trade Representative Ron Kirk has emphasised that the Obama White House wants to work with American trade partners towards a deal. But besides a call for big emerging countries like Brazil, India and China to open up their markets more, Kirk has given little indication of how the administration, which is still conducting a review of trade policy, sees the talks evolving. “Everybody is waiting to see what the United States does,” said the WTO ambassador of a major emerging country. “The general perception is that this round is in deep freeze unless the United States begins to thaw it.” World leaders will next take stock of progress in the Doha talks at a G20 summit in Pittsburgh on September 24-25. In a speech to steelworkers in Pittsburgh on Thursday, Kirk emphasised the administration's determination to enforce existing trade agreements to protect American jobs. He singled out the need to protect labour standards - a sensitive issue as workers in rich countries fear such practices can put them at a competitive disadvantage, while poor countries worry they can be abused to promote protectionism. Kirk's speech could be seen as an attempt to reassure a sceptical domestic audience about the benefits of trade. “From day one, President Obama has focused on moving our nation toward economic recovery. Increased trade, coupled with strong enforcement, is an integral part of our plan,” he said. Trade may not be the highest priority for the new administration which may therefore want to think carefully before spending political capital on it. But economic recovery is the top priority, said Stuart Harbinson, senior trade policy adviser at law firm Winston and Strawn. “There is a realization that trade can contribute to that,” he told a conference at the International Centre for Trade and Sustainable Development (ICTSD) on Wednesday. The Doha round, launched in the Qatari capital in 2001 to help poor countries prosper through trade, has been written off many times as WTO members squabbled over calls to cut tariffs and subsidies to boost commerce in food, goods and services. But political will to complete the deal - which WTO Director-General Pascal Lamy estimates could boost the world economy by $130 billion - has returned. “We're now in this interesting situation in which a new lifeline has been thrown to the round by the economic crisis,” said Harbinson, who as a former senior diplomat at the WTO helped launch the Doha round. After a failed meeting of ministers last July, the talks went into suspension with the US presidential election last November and Indian election in April and May. India's new trade minister Anand Sharma too has said he wants to get the talks moving and India will host a meeting of key trade ministers on September 3-4 after the European summer break to review progress on the Doha talks. Negotiators do not expect anything dramatic from the meeting, but it will add to the diplomatic pressure for a deal. “It's part of that entire process of building consensus around early completion,” said the WTO ambassador of a big developing country. Further declarations of political will are likely when Pacific Rim trade ministers meet in Singapore next week. But detailed talks by negotiators in Geneva this week on industrial goods and next week on agriculture seem to be stuck on clarifying positions, diplomats said. One problem, economists say, is that no one knows the value of a deal, with estimates of its worth ranging widely. More specifically, no one has more than a vague idea of how the various offers and concessions will translate in practice into actual tariffs and subsidies, given the many waivers and exceptions that different groups of countries can employ. That is why the United States has been calling on the big emerging countries in particular to say exactly which markets they will open up and by how much. Agricultural economists such as David Blandford of Pennsylvania State University have shown how governments can reclassify subsidies to keep them within the WTO rules. For instance if it chose to, the United States could comply with proposed Doha cuts in farm supports by cutting subsidies to dairy farmers, allowing it to keep supports for commodities such as corn, wheat, soybeans and rice fully in place.
