Trade ministers order Doha push

DAVOS, Switzerland Sat Jan 29, 2011 12:45pm EST

DAVOS, Switzerland (Reuters) - Two dozen trade ministers agreed on Saturday to make a final push for a new trade deal, ordering their officials to do what it takes to make the necessary compromises.

World Trade Organization members had been intensifying efforts to finally clinch a deal in the decade-old Doha round after the G20 said 2011 was a window of opportunity to reach agreement.

Negotiators at WTO headquarters in Geneva have been waiting for ministers meeting on the sidelines of the World Economic Forum in the Swiss ski resort of Davos to give a clear signal that they should make the necessary concessions and trade-offs.

"There is unquestionably a renewed sense, in some people of urgency, in some people optimism, but ... we have yet to see substantial progress," U.S. Trade Representative Ron Kirk said.

"But we do think there is a different negotiating dynamic," he told Reuters in an interview.

Ministers acknowledged that there were still big differences to overcome to agree a new set of rules opening up trade in food, industrial goods and services that would boost the global economy and strengthen defenses against protectionism.

But they said they were telling officials to negotiate in a spirit of give-and-take to produce a deal each can sell at home.

"There will be demands from all sides in the final lap and if demands are made then there has to be reciprocity," Indian Commerce Minister Anand Sharma told reporters.

Saturday's meeting did not get into specific issues but was more about the negotiating process.

DIFFERENCES

Even here there were some differences.

EU Trade Commissioner Karel De Gucht said ministers had agreed to reach an outline agreement by July. U.S. trade chief Kirk said there had been no agreement on timing. A statement from the Swiss government, that hosted Saturday's talks, said overall agreement was needed by July.

The talks have staggered on since their launch in late 2001 to open world markets and help poor countries benefit from trade. But officials say there is a new sense of hope this time and WTO Director-General Pascal Lamy told a news conference a deal was possible this year if talks accelerate further.

Washington is calling on the big emerging countries like China, India and Brazil to open their markets more to foreign -- including American -- businesses as a reflection of their growing economic clout.

Emerging economies argue that the deal is largely in place, based on the last intensive spate of negotiations in 2008, and if Washington wants more it must pay with further concessions of its own.

The United States drew support from the EU on Saturday, with De Gucht telling reporters that the state of negotiations in 2008 was only a starting point, and an unbalanced one at that, with much unfinished business.

Washington believes that even from a development standpoint, the best opportunities for poorer countries will come in the emerging economies, as U.S. tariffs are already so low that further cuts can offer only incremental benefits, while the emerging economies are growing faster than rich nations.

According to one official, Peru, Indonesia, Malaysia and Costa Rica all spoke up on Saturday calling for a deal that would promote more South-South trade.

The challenge will be to find a deal that gives everyone the benefits they seek without causing too much pain to farmers or workers in sensitive industries.

Whatever the exact timing, all agree that to reach a deal this year, perhaps with a formal signing at the WTO's ministerial conference in December, negotiators will have to work intensely over the next few weeks to produce revised drafts of an agreement by late April or so.

Further work to narrow the gaps would let ministers meet before the European summer break and try to resolve a few remaining issues in a series of last-minute trade-offs.

That would not form a final agreement, but the broad outlines of a deal, such as formulas for cutting tariffs, and major exceptions to that, leaving the rest of the year for negotiators to fill in the details.

New difficulties can always arise. Brazil's Foreign Minister Antonio Patriota, possibly opening a can of worms, told the meeting negotiators needed to consider the impact of exchange rates on trade.

But ministers believe that this may now be the last chance to reach a deal, and failure to do so would not only kill the negotiations but hurt the system of trading rules umpired by the

WTO.

"Either we do it this year or we get into real trouble," De Gucht said.

(Editing by Mike Peacock)