U.S.-China rivalry dominates start of WTO meeting

Thu Dec 15, 2011 3:14pm EST

* Rise of developing countries a quandary for WTO

* China says duties on U.S. autos within WTO rules

* Oxfam slams aid for Africa cotton producers as PR stunt

By Tom Miles

GENEVA, Dec 15 (Reuters) - Sparring between China and the United States dominated the start of the World Trade Organization biennial conference on Thursday, with each obliquely blaming the other for deadlock in the Doha round of trade talks which has all but paralysed the WTO.

Without mentioning each other by name, China's Commerce Minister Chen Deming and U.S. Trade Representative Ron Kirk each suggested the other was to blame.

Kirk said the current impasse in negotiations came down to "one single, vexing quandary: the WTO has not come to terms over core questions of shared responsibilities among its biggest and most successful members.

"The world has changed profoundly since this negotiation began a decade ago, most obviously in the rise of the emerging economies. The results of our negotiations thus far do not reflect this change, and yet they must if we are to be successful," he said in a speech at the opening of the meeting.

The rise of developing countries, chief among them China, has tied the Doha negotiations in knots. The trade liberalisation effort was originally meant to help developing countries, but those same countries are now trading giants, calling into question the need to give them special help.

But China and other developing countries have refused to give up on Doha. Chen suggested the negotiations were being held up by U.S. politics and could be resumed after the presidential and congressional elections next year.

"I know that the current difficulties were not just brought about by the current financial crisis. It was also due to the fact that some countries are entering into a cycle of political elections and therefore are not in a position to be flexible.

"It seems a bit like hibernation right now but spring is not far away," he told a news conference.

The ministerial meeting is not expected to make any progress on the Doha round itself, but diplomats hope it will give some guidance about what to do next, as well as renewing promises to guard against protectionism.

SHATTERED HOPES

But any hope for unity was shattered even before the meeting began. China slapped anti-dumping duties on U.S. exports of large cars and SUVs on Wednesday, widely seen as the latest volley in a trade war with the United States.

Chen said the duties conformed with WTO rules and were not protectionist, adding anyone who thought they were could use the WTO system to challenge them.

"We have to draw a clear line between protectionist measures and normal trade remedies," he said.

In a bid to show themselves as the friend of the poorest countries, despite the failure to agree on Doha, the two had earlier separately unveiled packages of help for Africa's "Cotton Four": Mali, Benin, Chad and Burkina Faso.

The U.S. package included $16 million over four years, while the Chinese deal mentioned $20 million over three years.

Romain Benicchio, a policy advisor at Oxfam, rubbished the U.S. offer as "largely a face-saving public relations gesture" by the world's biggest cotton exporter.

"Offering poor countries market access for cotton is like Saudi Arabia offering to drop tariffs on oil. The main problem has never been U.S. cotton market access, but U.S. cotton subsidies and dumping," Benicchio said in an emailed statement. (Reporting by Tom Miles; Editing by Sophie Hares)

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