January 28, 2011 / 8:06 PM / in 7 years

Leaders call for global trade deal this year

DAVOS, Switzerland (Reuters) - World leaders appealed on Friday for all nations to make concessions and reach a deal on long-running trade talks by the end of this year or risk losing the opportunity for years.

British Prime Minister David Cameron told the Davos World Economic Forum it was “frankly ridiculous” that the Doha round of world trade talks had so far limped on for a decade.

“We simply cannot spend another 10 years going round in circles,” he said. “...I call on every world leader to join me. We’ve got one last chance to get this right -- 2011 is the make or break year.”

Cameron spoke alongside German Chancellor Angela Merkel, Indonesian President Susilo Bambang Yudhoyono and World Trade Organization (WTO) chief Pascal Lamy.

“The right answers in this crisis must also to reduce barriers,” Merkel said. “...the cheapest way to boost our competitiveness and to give a boost to our economic development is free trade.”

Yudhoyono said that “fair, free and open trade is more important than aid” for developing nations.

The European Union, the world’s biggest exporter, hosted a dinner on Friday for trade ministers from the other key players -- Australia, Brazil, China, India, Japan and the United States -- in Davos.

The seven will take stock of the Doha round. Members of the World Trade Organization have agreed to intensify the pace of negotiations, already in their 10th year, after the G20 urged them to use 2011 as a window of opportunity to reach a deal.

But a warning from the trade ministers of Brazil, India, China and South Africa ahead of the dinner underlined just how difficult compromise could be.

The four ministers said concessions already made by their emerging economies were not being matched by rich countries, who were now demanding more, and that such demands jeopardized efforts to conclude the Doha round.

Friday’s dinner will be followed by a broader meeting of about 25 trade ministers on Saturday.

A report by trade experts presented at Friday’s panel discussion recommended heads of government get personally involved in reaching a Doha trade deal and set themselves an end-year deadline to achieve it.

“What is already on offer is a package that would provide a global economic stimulus of hundreds of billions of dollars in new trade annually,” the report’s preface said.

“Everyone would gain.”

The Doha round was launched in late 2001 to boost the world economy and help poor countries prosper through trade.


The wide-ranging and complex talks have missed repeated deadlines and some negotiators say 2011 will go the same way, perhaps dooming the negotiations altogether.

U.S. President Barack Obama showed little interest in a WTO deal in his first two years in office, mindful of his supporters in organized labor and their Democratic allies in Congress.

But in recent months the talks in Geneva have moved up a gear and some believe the necessary trade-offs are now possible.

“There seems to be a general acceptance that what is needed to bring Doha to a successful conclusion is for the major countries to bring a little bit more to the table,” Australian Trade Minister Craig Emerson told Reuters.

Emerson said Australia, one of the keenest proponents of a deal, does not believe that it is the one blocking agreement, but would consider further concessions as part of a final push.

“If it’s a matter of the demonstration of good faith and everyone bringing more to the table then Australia would be a willing participant in that, ”Emerson said.

In the end the deal will require bilateral agreement between the United States and China, the world’s two biggest economies.

But it is much more complicated than that, with competitive exporters among the emerging economies wanting to boost South-South trade by opening markets as well.

There is no sign so far of progress narrowing gaps on proposals allowing developing countries to limit imports of food, which contributed to the collapse of a meeting of ministers to push for a deal in 2008, said Gonzalez, who was a top WTO agriculture official during that meeting.

“That continues to be a very contentious issue,” she said.

The changing nature of world trade may also make it easier to open markets by cutting import duties, as global supply chains mean tariffs amount to a tax on your own business. “If you protect imports you will damage your exports,” World Trade Organization Director-General Pascal Lamy told reporters.

Writing by Michael Stott, editing by Paul Taylor

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