No chance of early start to WTO talks

Date: 04/05/2000

By Simon Taylor

Despite Trade Commissioner Pascal Lamy's best efforts to launch a new round of trade liberalisation talks this year, the consensus among seasoned officials is that his chances of success are close to zero.

Attempts to bring China's giant economy into the World Trade Organisation's ambit have been the top priority for negotiators on both sides of the Atlantic this year, diverting political energy away from the task of getting a new round off the ground. Most officials believe there will be no real progress until after a new US president takes office next year.

For now, the Clinton administration has enough on its plate convincing Congress to accept the deal struck between the US and China on the terms for its entry into the WTO. Clinton's hopes of a major trade coup as a final feather for his presidential cap are looking dim after the most senior Democrat in the house, Dick Gephardt, said he would not back the deal. The Democrats are under pressure from labour unions who warn that opening US markets to competition from China's low-cost workforce could cost 800,000 jobs.

The Commission has also expended considerable energy on steering China into the WTO on the right terms. Lamy has been shuttling back and forth between Brussels and Beijing in recent months in an attempt to clinch a deal, and will travel to China again on 15 May for further talks. But hopes of a rapid breakthrough are slim as Beijing continues to resist the EU's demands for better offers in areas such as insurance and financial services.

Lamy has squeezed his negotiating sessions with the Chinese in between efforts to convince developing countries to back a new round. He has taken the lead in efforts to rebuild support for the WTO, which suffered a paralysing blow at last December's Seattle ministerial summit.

Trade ministers from the world's poorest nations attacked the EU and other rich nations for dictating the WTO's agenda and stitching up deals in backrooms which the rest of the world was expected to swallow.

It was Lamy who spearheaded the move to scrap duties and quotas on virtually all imports from the world's 48 poorest countries which the US, Japan and Canada have now signed up to. But while developing countries are keen to gather all the trade concessions they can, officials have no illusions that the package will clear the way for a new trade round soon.

Article forms part of a suvey, 'Industrial liberalisation'.