Obama trade talk offers hope amid Doha gloom

GENEVA (Reuters) - A breakthrough this year in world trade talks looks unlikely, but U.S. President Barack Obama has provided a glimmer of hope that a deal can ultimately be achieved by talking up the economic benefits of trade.

In last Wednesday's State of the Union speech, he launched a drive to double U.S. exports over five years -- expressly linking the U.S. recovery to trade.

Australian Trade Minister Simon Crean, a keen supporter of a Doha deal to open up global commerce, said this could help shift the debate over the long-running international trade talks to one of stimulus and jobs.

"Look at President Obama's speech where he talks about the objective of doubling exports. That can't be done unless trade is liberalized," Crean said at the Davos forum last week.

Leaders in the G20 and other forums have called repeatedly for a conclusion of the Doha round by the end of the year.

Doha was launched in late 2001 to help poor countries prosper through trade and is the longest-running international trade round.

It would open up markets by cutting rich countries' farm subsidies, lowering tariffs on industrial goods in rich and emerging countries and freeing up trade in services.

On Saturday trade ministers from 20 economies held their traditional meeting on the sidelines of the Davos forum and expressed gloom at the prospects of reaching a deal this year.

Several of them echoed what many negotiators have been saying for the past year -- that the talks are going nowhere because Washington, with bigger priorities like healthcare and a poisonous political climate for trade, is just not interested.

Washington did not send the U.S. trade representative, Ron Kirk, to Davos, and was not even represented by an ambassador.

The Senate has still not confirmed Obama's nominee as ambassador to the World Trade Organization, Michael Punke, in what some observers believe is a clear sign of the importance accorded to trade policy in Washington.

PRIORITY LIST

"Those who figure that it's so far down their priorities may be wrong -- but that's the message I'm getting," said David Hartridge of law firm White & Case, and a former acting director-general of the WTO. "I would think it surprising if anything involving political decisions could be done this year."

But there are indications that the lack of interest may be changing.

Having spent much of his first year convincing supporters in the Democratic Party and the unions that the focus of his trade policy was the tough enforcement of existing deals, Obama has been talking up the job-creating potential of trade recently.

That could suggest he is preparing the ground for a trade push in the longer term, maybe after this year's mid-term elections.

Obama's call for more trade -- in particular with Panama, Colombia and South Korea -- reaches out to Republicans and their business supporters, a message he repeated in a meeting with the minority party on Friday.

Hartridge, who can look back on 40 years of trade negotiations, says the American political process has often held things up in the past, but in the end the United States does have a tradition of leadership in global commerce.

"There have been such periods and the U.S. has always been there and always delivered," he said.

BRAZIL PROPOSAL

One proposal to get the stalled talks moving came from Brazil's foreign minister, Celso Amorim, who suggested a G20 summit to tackle the major outstanding issues, such as a mechanism to protect farmers in poor countries from a sudden flood of food imports if they liberalize agricultural trade.

Amorim pointed to the success of key leaders at December's climate change summit in Copenhagen in snatching a modest deal from complete failure.

But his idea flies in the face of conventional wisdom at the WTO that leaders or ministers should be asked to settle only a few tough political issues and not get into the technicalities.

What is clear is that even if Doha's latest 2010 deadline is missed, no one will declare the round a failure.

"The one thing that will not happen -- because it never does -- is an admission that this thing will never happen," Hartridge said.

(Additional reporting by Paul Taylor in Davos)

(Editing by Robert Evans and Noah Barkin)