January 29, 2011 / 2:50 PM / 7 years ago

U.S. hails new Doha negotiating dynamic

DAVOS, Switzerland (Reuters) - The United States hailed a new tone in negotiations for a global trade agreement on Saturday, but said it had yet to see substantive progress in the decade-old Doha round.

U.S. officials say they have worked hard to inject new realism into the Doha talks which have stalled repeatedly since their launch in late 2001 but have recently taken on new life.

"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.

Kirk was talking after two dozen trade ministers, meeting on the sidelines of the World Economic Forum in Davos, agreed to push for an outline deal in the Doha talks and instruct their negotiators to make the necessary compromises to reach it.

One of the obstacles to a deal in the past few years was a difference between the United States and big emerging economies like China, Brazil and India over the role they should play in opening up markets.

Washington argues that the growing economic clout of the emerging economies means they have a duty to provide more opportunities for exporters from other countries, while the emerging countries say they have already offered enough in a negotiation that is supposed to benefit developing nations.

CHINA

The U.S.-Chinese relationship -- bedeviled by differences from defense to currencies -- is the key both to the Doha talks and other geopolitical issues.

Kirk said this relationship had evolved significantly.

"It does feel like there has been a demonstrable and positive change in the tone of our engagement with our colleagues from China," he said.

This did not mean that China had made the trade commitments that the United States was seeking. "But we have a much more positive environment for that conversation," he said.

Kirk repeated his view that the best prospects in the Doha round for increased trade for poorer countries lay with emerging economies.

This was because U.S. tariffs were already very low and any changes agreed in Doha could make only an incremental difference.

"One of the real opportunities for some of the least developed economies is going to be in trade with these emerging new market powers," he said.

One official familiar with the talks at Saturday's meeting said that ministers from four developing countries -- Peru, Indonesia, Malaysia and Costa Rica -- had spoken up for the need for more South-South trade.

The reduction and abolition of agricultural subsidies in rich countries was one of the core goals of the Doha talks when they were launched, and the United States and European Union are still expected to make big cuts in an eventual deal.

Kirk said growing world demand for food, as populations rise and diets in many poorer countries change with rising prosperity, meant there would be plenty of demand in future for the goods of agricultural exporters, rich and poor.

But the need to attack the U.S. budget deficit was certain to put the spotlight on farm support when lawmakers discuss the news U.S. farm bill in 2012, he said.

For full coverage, blogs and TV from Davos go to www.reuters.com/davos

Reporting by Jonathan Lynn, editing by Mike Peacock

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