Swiss pessimistic about world trade talks

Annan called on rich nations to take the initiative to re-start trade talks Keystone Archive

A successful conclusion to the current round of world trade talks is highly unlikely this year, the Swiss economics minister warned on Friday.

Joseph Deiss made the comment after hosting a meeting of 19 trade ministers and officials from around the world at the World Economic Forum summit.

“It’s not a question of being negative or not – it’s about being realistic,” said Deiss.

“There is too much to be done in order to get it through.”

Despite his blunt assessment, Deiss said the informal talks were a success.

“I didn’t feel this morning [that we] had a discussion between [opposing] blocks. We also tried not to talk about what we disagree on, but on what we agree about.”

Trade issues have been one of the major themes at this year’s WEF meeting.

Many hope the summit will act as a catalyst to revive the current round of World Trade Organization talks, otherwise known as the Doha round.

Negotiations collapsed in September at a summit of trade leaders in Mexico, amid disagreement over agricultural tariffs.

Developing countries want the governments in Europe and the United States to drop subsidies worth some $350 billion (SFr435 billion) a year to farmers, so they can compete on a level playing field.

The EU and the US have agreed to make cuts, but poorer countries say they don’t go far enough.

Grave peril

United Nations Secretary General Kofi Annan added to the chorus of voices in Davos calling on rich nations to take the initiative.

“More than anything else, we need a poor-friendly deal on agriculture. No single issue more gravely imperils the multilateral trading system from which you benefit so much,” Annan told the forum.

“Agricultural subsidies skew market forces. They destroy the environment. And they block poor-country exports from world markets.”

Supachai Panitchpakdi, the WTO’s director-general, said he still believed the Geneva-based organisation could meet the deadline of the end of the year.

“I guess if the political will is there, if people do as they say they are going to do and give instructions to the Geneva people, we should have more than enough time to finish,” he said.

Friday’s meeting, which was hosted by the Swiss, drew representatives from several key countries involved in the Doha round, including the US and Brazil.

Need for flexibility

While experts said there was next to no chance of a breakthrough in Davos, they said the meeting had helped refocus attention on trade.

Deiss said everyone present agreed that they did not want to see this year wasted.

“We must ensure that real negotiations start and avoid repetition of the same positions,” he said. “We need flexibility so that all partners can move in the general direction of a consensus.”

He added that there was growing optimism about the prospect of a ministerial-level summit involving all 148 WTO member states, slated to be held in Hong Kong at end of the year.

But Deiss said it only made sense to hold the meeting if there was a real chance of success.

Opposition

While trade ministers met on the sidelines of the WEF summit, some of the world’s most powerful business leaders gathered to hold a “brainstorming” session on how to resurrect Doha.

And it was that image – of corporate bosses holding secretive meetings on the future of world trade – that has enraged critics of the talks hosted by Deiss.

A handful of anti-globalisation protesters dressed in sheep costumes stood near the entrance of the heavily guarded conference centre.

Bleating loudly, they accused Deiss of allowing himself to be blindly led by multinational corporations.

swissinfo, Jacob Greber in Davos

In brief

The Swiss economics minister, Joseph Deiss, says he’s pessimistic that world trade talks will conclude successfully this year.

His comments came after hosting a meeting of 19 trade ministers and officials from around the world on the sidelines of the WEF.

Trade negotiations collapsed in September at a summit of trade leaders in Mexico amid disagreement over agricultural tariffs.

The UN Secretary General has urged rich countries to take the first steps to reviving the stalled talks.