Trade ministers to send signal to Doha talks

DAVOS, Switzerland Fri Jan 28, 2011 3:37am EST

Participants pass a World Economic Forum (WEF) logo in Davos January 27, 2011. REUTERS/Christian Hartmann

Participants pass a World Economic Forum (WEF) logo in Davos January 27, 2011.

Credit: Reuters/Christian Hartmann

DAVOS, Switzerland (Reuters) - Trade ministers must set an example of compromise when they meet on Friday to negotiators in the long-running Doha trade talks if they also want the backing of voters back home, trade policy-makers said.

The European Union, the world's biggest exporter, is hosting a dinner for trade ministers from the other key players -- Australia, Brazil, China, India, Japan and the United States -- during the World Economic Forum in Davos.

The seven will take stock of the Doha round after members of the World Trade Organization agreed to intensify the pace of negotiations, already in their 10th year, after the G20 urged them to use 2011 as a window of opportunity to reach a deal.

"What we will try to get from ministers is acceleration," said WTO Director-General Pascal Lamy.

Lamy will not attend Friday's dinner, but will take part in another meeting of some 25 ministers, including the seven, on Saturday.

The host of Friday's dinner, EU Trade Commissioner Karel De Gucht, agreed further moves were needed by all players.

"Everyone around the table realizes that if you negotiate it's about give and take. There's nothing bad about a compromise," he told Reuters.

The Doha round was launched in late 2001 to boost the world economy and help poor countries prosper through trade.

While economists differ over the impact of opening markets in food, industrial goods from cars to chemicals, and services such as banking and law, several studies show a new trade agreement could add hundreds of billions of dollars to the world economy, bolstering business sentiment.

CRITICAL YEAR

British Trade Minister Stephen Green told Reuters Insider 2011 was a critical year to reach a deal that could significantly increase global prosperity.

Other economists say a deal would do little and could hurt developing countries. The wide-ranging and complex talks have missed repeated deadlines and some negotiators say 2011 will go the same way, perhaps dooming the negotiations altogether.

But in recent months the talks have moved up a gear and some believe the necessary trade-offs are at last possible.

"There seems to be a general acceptance that what is needed to bring Doha to a successful conclusion is for the major countries to bring a little bit more to the table," Australian Trade Minister Craig Emerson told Reuters.

Emerson said Australia, one of the keenest proponents of a deal, does not believe that it is the one blocking agreement.

But he said it was willing to consider further concessions as part of a final push.

"If it's a matter of the demonstration of good faith and everyone bringing more to the table then Australia would be a willing participant in that," Emerson said.

For instance Australia could consider making further cuts in its already low tariffs, or accepting binding restrictions on the role of AWB, the former monopoly exporter, he suggested.

A deal would also bolster the WTO's rules-based system that had helped the world through the deepest economic and financial crisis since the 1930s with a minimum of protectionism, he said.

In the end the deal will require bilateral agreement between the United States and China, the world's two biggest economies.

But it is much more complicated than that, with competitive exporters among the emerging economies, like Thailand and Chile, wanting to boost South-South trade by opening markets as well.

The changing nature of world trade may also make it easier to open markets by cutting import duties, as global supply chains mean tariffs amount to a tax on your own business.

"If you protect imports you will damage your exports," Lamy told reporters.

(Editing by Mike Nesbit)

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