Food crisis still playing out on world trade: U.S.

U.S. Trade Representative Susan Schwab speaks during a briefing about the Colombia Free Trade Agreement in Washington April 9, 2008.

NUSA DUA, Indonesia (Reuters) - Soaring food prices could encourage nations to remove barriers on food imports, but there is also a risk panic over food could hurt global trade, U.S. Trade Representative Susan Schwab told Reuters on Sunday.

Progress has been made in talks over a long-delayed global trade deal, although a renewed push was needed in some areas to meet a goal of passing the Doha round this year, she said.

Schwab, who was attending a Southeast Asian trade meeting on the Indonesian resort of Bali, said it was only just becoming clear what impact the food crisis was having on world trade.

"It seems to be sort of a push me, pull you kind of impact," she said, noting that Doha could get impetus from countries bringing down barriers on food imports, but adding that new trade distortions could also emerge from worries over access to food.

"Which really would hurt the Doha round, because it flies in the face of what you should really be doing, which is really eliminating as many distortions as you can so you have a free flow of food," she said.

Countries including India, Vietnam, Indonesia and Brazil have imposed curbs on food exports in a bid to secure domestic supplies and limit inflation, spooking big food importers.

In Asia, in particular, concern over rice prices is growing after several countries imposed export restrictions.

Schwab said soaring rice prices was a big topic at the Bali meeting.

"And it doesn't take long for the conversation about rice and the situation about food prices to gravitate into a discussion about Doha," she said in an interview.

"There is a sense that we've got a window within the next, you know, month or so, where we have a chance of that breakthrough once again and that it's worth the investment of time and energy to get there," she said.

CRUCIAL TRADE MEETING

She said May 19 was one of the dates that had surfaced for holding a potentially key Geneva meeting of World Trade Organisation ministers.

"I don't know if it's the 19th, if it's the 26th, but I can tell you the dates are sliding week by week, not month by month, which is perhaps the more significant indication."

The Doha talks have been frequently bogged down by discussions over technical issues, often related to agriculture.

"I think we are really close to having laid out all the key parameters for sensitive products," she said, referring to politically sensitive agricultural products that countries can opt to shield from the full impact of tariff cuts.

In other areas, there was more work to be done, she said.

"But I think what we're talking about here, and this is most significant, we're within a few weeks of taking a run at a horizontal process and that would start with the senior official process and then you'd have ministers come together," she said.

The "horizontal process" is where negotiators make trade-offs between agricultural and industrial items.

Schwab played down concerns that any Doha agreement could struggle to get through Congress, which has failed to pass a free trade agreement with Colombia under the Bush administration.

"Traditionally, there's been more political push-back on bilateral free trade agreements than multilateral agreements."

The Doha talks were launched in 2001 to lower barriers to trade to give the world economy a lift and help the poorest countries to fight poverty by exporting more, but negotiators say without a breakthrough soon they could face more years of delay or outright collapse.

(Additional reporting by Gde Anugrah Arka)