WTO plan protects emerging countries: EU employers

GENEVA (Reuters) - Compromise proposals in world trade talks for lowering export barriers to manufactured goods will allow big emerging nations like Brazil or India to keep significant protection, a European business representative said.

Measures to let developing countries shield some products from the full impact of import tariff cuts would be a problem for exporters wanting a piece of their markets, said Adrian van den Hoven, trade director at employers group BusinessEurope.

"This will lead to a risk of a lot of carve-outs from the formula cuts," he told Reuters on Friday, as details of the compromise proposals emerged from a meeting of trade ministers at the World Trade Organisation.

The proposals would allow developing countries to use so-called "flexibility" measures to protect up to 80 percent of tariff lines in a given sector against the full impact of tariff cuts, and up to 91 percent of the value of trade in a sector.

The effect of those and other measures could frustrate European car makers hoping to get better access to fast-growing markets in developing countries although textile exporters might not be hindered, van den Hoven said.

The proposal represents a concession by developing countries, who previously argued that an agreement that flexibilities should not lead to entire sectors being exempted from full tariff cuts was sufficient, and specific limits did not need to be spelled out.

Another clause in the draft would set out rules for countries that choose to enter "sectoral" agreements which would see them reducing or cutting to zero their import tariffs in specific sectors.

The proposals said countries agreeing to join in would have to commit to participate in two sectoral agreements, a long-standing demand of the United States.

Van den Hoven said Europe's chemicals and engineering sectors would be keen for such agreements while in the United States, chemicals and electronics would be likely candidates.

Again, the inclusion of this proposal is a concession by developing countries who had previously said that participation in sectoral deals was voluntary and not part of the current negotiations.

(Reporting by William Schomberg)