WRAPUP 1-Doha hopes improve amid trade data gloom

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Wed Jun 24, 2009 3:46pm EDT

* U.S.-India trade ties bode well for Doha negotiations

* Brazil rejects U.S. call for emerging country concessions

* WTO chief Lamy sees 10 pct contraction in world trade

By Jonathan Lynn

PARIS, June 24 (Reuters) - Warm ties between the new U.S. and Indian trade ministers raised hopes on Wednesday the long-running Doha trade talks could be revived as a gloomy trade forecast underlined the need to fight protectionism.

U.S. Trade Representative Ron Kirk said he was looking forward to working closely with his new Indian counterpart after a series of encouraging meetings.

A row last July between the United States and India over a proposal to help farmers in poor countries cope with a flood of cheap imports, exacerbated by uneasy relations between the then U.S. and Indian trade chiefs, helped scuttle a meeting of ministers trying to clinch an outline Doha deal.

"These are very difficult negotiations and even though they take years to complete I think sometimes interjecting new blood, new urgency, new ideas can breathe impetus to get us over the top," the former Dallas mayor told Reuters.

"I have had a number of opportunities already to meet with the new Indian trade minister, Anand Sharma. I'm very encouraged by what I've heard from him and look forward to continuing to work with him," Kirk said on the sidelines of the Organisation for Economic Cooperation and Development ministerial meeting.

The Doha round was launched in the Qatari capital in late 2001 to help poor countries prosper through more trade. Since then developed and developing countries, and importers and exporters, have edged closer to a deal to free up trade in goods from food to chemicals, liberalise services like banking and transport, handle disputes and limit fishing subsidies.

But testy relations among the key trading powers and the difficulty of reconciling the interests of all members of the World Trade Organisation, now 153, have caused the talks to stumble repeatedly.

'TOTALLY UNFAIR'

Comments from Brazil's Foreign Minister Celso Amorim showed how difficult it remains to reach a deal which all countries say is desirable.

Amorim condemned a call by Kirk -- echoing the stance of the previous U.S. administration -- that big emerging countries should open up their markets more to help secure a deal.

"I think this pre-selection of some countries to make some concessions is totally unfair," he told a news conference.

Amorim said he was willing to talk to Kirk about making adjustments in the broad package on the table since July, but said Brazil was unwilling to reopen the negotiations completely.

WTO Director-General Pascal Lamy said the mood of the negotiations had improved since the appointments of Kirk in March and Sharma last month.

"Having good atmospherics on the U.S. side and on the Indian side is a sort of precondition for re-engaging at the political and then at the technical level," he told Reuters.

But Lamy said good feelings were not enough.

"WTO deals are not about atmospherics, they're about numbers, commitments, rules which are very detailed, which is why it's usually complex," he said.

Lamy has estimated that a new Doha deal would be equivalent to a global fiscal stimulus of $150 billion, while reaching agreement on a new set of trade rules would be a valuable bulwark against protectionist pressures in the economic crisis.

But despite signs of recovery from the economic crisis in some places, the WTO is revising down its forecast in March that world trade volume would contract a record 9 percent this year.

"If anything it probably will be more like minus 10 percent than minus 9 percent in volume, which is a huge drop," Lamy said.

"I'm afraid I can't read any good news in my trade numbers."

The WTO trade chief said he was confused and perplexed by a move by Russia, the biggest country still outside the WTO, to drop its 16-year-old bid to join the trade body and enter instead into a customs union with ex-Soviet allies Belarus and Kazakhstan.

"WTO members are still very unclear about what the next steps could be." He said it was not certain a customs union based on unified import duties could negotiate rules on WTO areas beyond tariffs such as health standards and intellectual property.

U.S. Trade Representative Kirk dismissed Russian charges that the United States and European Union were to blame for the failure of Russia's bid.

"Let's be clear on this -- this is a Russia-created crisis and one they have to resolve," he said. (Editing by Robert Woodward)

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