Business groups tell Lamy need more from Doha

WASHINGTON (Reuters) - Leading U.S. business groups told World Trade Organization Director General Pascal Lamy on Tuesday they can not support current proposals for finishing seven years of talks on a global trade deal.

“We stressed repeatedly that our three organizations want this to work. We’re not throwing up roadblocks,” said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

“But what we want is for it to produce results (by increasing trade). We’re the organizations that are going to have to get this through Congress,” Vargo told reporters.

Lamy met with leaders from the manufacturers groups, the American Farm Bureau Federation and the Coalition of Service Industries near the end of two days of meetings with members of Congress and Obama administration officials.

The three business groups, in a recent letter to President Barack Obama, said they did not believe the round could be concluded on the basis of texts proposed in December.

They complained it required too much in manufacturing tariff and farm subsidy cuts from the United States in exchange for meager new export opportunities.

U.S. trade officials have taken the same line, saying leading developing countries such as Brazil, India and China must make much better offers to open their markets.

Obama, in an opinion piece that ran in 30 newspapers around the world on Tuesday, called on countries to take collective action to rescue the global economy.

He did not mention the Doha round launched in late 2001 with the goal of helping poor countries prosper through trade.

Lamy has argued successfully that concluding the Doha round would give the global economy a much-needed boost.

The Geneva-based WTO forecast on Monday world trade could fall 9 percent in 2009, the biggest drop since the end of World War Two, as a result of the turmoil.

But Vargo said any payoff from the Doha round would take years to materialize even if a quick deal on the main formulas for cutting subsidies and tariffs was reached.

John Engler, president of the manufacturer’s group, said the sharp trade decline bolstered the need for a strong line against protectionism at the Group of 20 developed and developing country summit in London on April 2.

“The standstill should be absolutely number one priority,” Robert Vastine, president of services coalition, said, referring to the pledge G20 leaders took in November not to impose new trade or investment restrictions for 12 months.

The WTO chief also faced resistance from Senator Charles Grassley to the idea of resuming Doha negotiations on the basis of the texts produced in December.

“Lamy did make his pitch that the talks should take up where they left off. Grassley said that’s really a no-go. He’s the most pro-free trade guy around, and he won’t go for the deal on the table,” a Senate aide said.

Reporting by Doug Palmer; editing by Chris Wilson