GENEVA — The head of the World Trade Organization issued a stark warning Thursday that decade-old talks on a new global commerce deal risk failure unless countries find a way to overcome seemingly unbridgeable differences over cutting tariffs on industrial goods.
After weeks of consultations with the WTO’s 153 member states, Pascal Lamy said the Doha Round of trade negotiations is at “serious risk” because developed and developing nations can’t agree on how to reduce duties on manufactured products such as chemicals and electronics.
“I believe we are confronted with a clear political gap which … is not bridgeable today,” Lamy said in his foreword to a summary of the state of talks released Thursday.
The document, prepared by the chairs of nine negotiating groups, shows little concrete progress toward a final text that all members can agree on. But the main stumbling block, as observers have pointed out for some time, is the refusal of major developing countries such as China, India and Brazil to markedly lower industrial tariffs, and the U.S. and Europe Union’s insistence that they do so.
Lamy urged diplomats to use the Easter break to reflect on how a deal might still be reached before they meet again in Geneva on April 29. “Think hard about the consequences of throwing away 10 years of solid multilateral work,” he said.
Smaller nations have expressed frustration in recent weeks that a handful of top trading powers are holding up the round that was launched in Qatar’s capital in 2001, and which was meant to add billions of dollars to the world economy by stimulating global trade.
“We are now in a very difficult situation and our ability to conclude the round this year might seriously be in question,” a group of 13 middleweight trading powers wrote in an open letter last week.
“We believe that a deal is achievable,” said the group, which included Indonesia, Australia and Switzerland. “We believe a deal is also worth fighting for, both in its own right, and in the longer-term interests of the multilateral trading system upon which we all so heavily rely.”
Others, like EU Trade Commissioner Karel De Gucht, signalled the world should prepare for a possible collapse of the round.
“There is no reason to be optimistic at this moment in time,” De Gucht told European lawmakers earlier this month, adding that if Doha talks fail there should be a “Plan B.”
Brazil’s ambassador to the WTO, Roberto Azevedo, said one option might be to split the Doha Round into more manageable parts.
“If we can’t break the impasse the next question is, is there anything we can salvage?” he said. “This conversation has not started.”