As this sample of headlines suggests, there wasn't much progress today:
- Global trade talks stalled and on verge of collapsing. (James Kanter, International Herald Tribune);
- Lamy warns WTO talks face crisis (Richard Waddington and Sophie Walker, Reuters);
- WTO round on the ropes as ministers launch talks (Richard Waddington and William Schomberg, Reuters);
- WTO: Global trade talks at a crisis (Bangkok Post);
- WTO talks appear to be heading for failure (The Hindu);
- WTO nations at loggerheads over trade barriers (Jonathan Fowler, Mail and Guardian online, S. Africa);
- Divisions continue to hamper trade talks (AP via Boston Globe);
- WTO talks in crisis as US rejects farm suppport cuts (Shada Islam, Monsters and Critics);
- WTO talks fail to make breakthrough (Richard Waddington and Sophie Walker, Reuters).
Negotiators and trade ministers have been unable to break into the iron triangle of subsidy, ag tariff, and industrial goods tariff concessions.
The E.U. Trade Commissioner, Peter Mandelson, made some interesting comments about the "EU 'landing ground'" at an informal Trade Negotiating Committee (TNC) meeting this morning: Mandelson sets out EU “landing ground” for farm/manufacturing deal (June 30) - according to the abstract:
In it he sets out what the EU believes constitutes a realistic “landing zone” for the Doha negotiation on farm tariff cuts, trade-distorting farm subsidies and industrial tariff cuts. He urges all sides to show further flexibility. Insisting that the EU will try to get as close as possible to the G20 proposal for farm tariff cuts, he says that the same level of ambition must also apply for US domestic trade-distorting farm subsidy cuts which must come down – not as far as to the $12 billion ceiling demanded by developing countries but “considerably”. Mandelson argues that a “real cuts for real cuts” scenario demands that such an agreement is completed by the G20 advanced developing countries offering
a formula for industrial tariff cuts with a coefficient of “15, not 20”.
For context, let me start by quoting WTO Director-General Pascal Lamy's comment on his perspective about the key to an agreement:
"If I was looking for a magic number . . . I would probably look around 20." He said this would mean the US adopting a $20bn ceiling for farm subsidies, developing countries cutting industrial tariffs to no more than 20 per cent and adoption of the G20's suggestion on farm tariffs.
The G20 proposal was an average cut of 54%, so Mandelson appears to be saying that, given conessions by its negotiating partners, the EU could move from its current offer of 39%, towards (but not to) 54%.
This industrial tariff coefficient refers to the coefficient in a simple Swiss formula, which relates the original tariff to the new tariff. The formula is:
New tariff = (C*"Old tariff") / (C+"old tariff"), where C is this coefficient of 15 or 20. The larger the coefficient, the smaller the tariff reductions.
Internal conflicts are making it complicated to interpret the EU negotiating posture. The Kantor story (Global trade talks stalled and on verge of collapsing.) in the list above, is very good, and provides details on the EU's difficulties: