WTO farm mediator calls for talks to restart soon

GENEVA (Reuters) - World Trade Organization talks, which collapsed last month over a proposal to help poor farmers cope with a surge in imports, need to resume soon to build on existing compromises, the WTO farm mediator said on Monday.

The issue reflected a deep political divide, New Zealand's WTO ambassador Crawford Falconer, who chairs negotiations on agriculture, said in a report to the WTO's 153 members on last month's meeting of ministers.

The discussion over the proposed "special safeguard mechanism," which would enable developing countries to raise tariffs to counter a flood in imports, could not be dismissed as merely a technical issue, Falconer said.

"If we want to fix this in something less than a three-year time horizon (which I hope we want to do), it has to be done in the very near term," Falconer said in the report.

"Each day that passes takes us further and further away from the preparedness to compromise that was certainly evident in that last week of July for much of the time."

The appeal received a restrained response in Washington, where U.S. Trade Representative Susan Schwab is due to meet WTO Director General Pascal Lamy next week to discuss future moves for the troubled trade talks.

"Ambassador Schwab will ... continue consulting with other trade ministers who demonstrated their commitment in Geneva to a successful outcome to the Doha round," USTR spokesman Gretchen Hamel said in an e-mailed statement.

"The U.S. remains committed to a successful Doha round. However, we continue to have deep concerns with proposals under consideration that would not only limit market opening by the world's fastest growing economies, but would actually raise new barriers to trade -- particularly against other developing countries."

BREAKING THE DEADLOCK

Ministers from about 30 WTO members met in Geneva at the end of July seeking a breakthrough in talks in agriculture and industrial goods, the core areas of the WTO's Doha round to open up world trade, launched in late 2001.

The talks collapsed over differences between the United States and big developing countries like India and Indonesia over the conditions under which poor countries could raise tariffs above current levels to deal with a surge in imports that threatened their subsistence farmers.

The United States said India's demand for an easily triggered safeguard would allow developing countries to hike tariffs above currently bound levels in response to normal trade growth, rather than a sudden surge of imports.

Washington has accused China of siding with India to try to roll back commitments Beijing made when it joined the WTO in 2001.

Falconer said the way to crack the deadlock was through intensive work by senior officials and he was willing to organize such negotiations in the coming weeks.

Besides the special safeguard mechanism, Falconer warned there were still a number of potential deal-breakers which had to be tackled, such as the level of cotton subsidies, which ministers did not even get as far as discussing last month.

But he said the state of negotiations last month reflected inconceivable progress compared with a year earlier, with the basis for a deal on many of the agriculture issues.

The Geneva meeting also exposed differences among developing countries, with exporters like Uruguay and Costa Rica concerned that they could lose markets in their vital South-South trade.

Brazil and Australia -- both big food exporters -- have since called on other WTO members not to abandon the negotiations. Lamy is visiting Delhi this week and Washington next to get a sense of whether the talks can be resumed.