EU fears focus on bilateral deals after Zoellick setback

Date: 29/03/01

By Simon Taylor

DESPITE growing hopes that the US backs a new round of world trade liberalisation talks, the Bush administration has suffered a setback in its battle for a fast-track negotiating mandate.

Robert Zoellick, the top US trade official, this week backtracked from earlier plans to combine requests from Congress for authority to negotiate two-way, regional and multilateral agreements.

A spokesman said the US trade representative (USTR) was still considering asking for a package approach but was not excluding other options.

But the news that Zoellick may have to water down his request to win Congressional approval will disappoint Union trade officials.

They are concerned that the Bush administration will concentrate on bilateral and regional deals at the expense of the World Trade Organisation (WTO) negotiations.

"When we were in Washington we supported Zoellick and the administration in their aim to secure authority [for a new round]," said a spokesman for Trade Commissioner Pascal Lamy. "If as a trading partner you come with a mandate the authority you have as a negotiator is stronger."

Bush is expected to discuss the prospects for a new round when he attends a summit of EU leaders in Göteborg in June. Zoellick faces pressure to drop the package approach from leading House Democrats who do not want to give the Bush team too much power in return for approving important deals with Jordan and Vietnam.

Trade officials suspect that Zoellick's plan is to flush out Democrats' concerns on labour and environment standards in a bid to win bipartisan support for new trade deals. The Democrats have led the calls for the next WTO round to include rules to keep market-opening from lowering working conditions and eco-protection levels.

Last week US Ambassador to the EU Richard Morningstar tried to calm fears that the

Bush administration was giving a higher priority to regional trade deals like the planned Free Trade Area of the Americas than to WTO talks. "The US can and will pursue bilateral and multilateral negotiations concurrently," he told a conference on transatlantic relations.

Senior EU and Japanese trade officials claimed this week that support was growing for launching a new round of WTO negotiations at the next ministerial gathering in Qatar in November.

In a joint statement made after a meeting called by the EU and Japan in Geneva, Commission Trade Director-General Peter Carl and

Japan's Deputy Foreign Minister Yoshiji Nogami said: "There was a general sense that we should try to launch negotiations at Qatar later this year, and certainly we are all better prepared for this than at the same point before Seattle. The momentum is definitely picking up."

They claimed that many WTO members, including developing countries, were concerned about a "global economic downturn and a return to bilateralism" and saw a relaunch of the multilateral process in the WTO as all the more necessary.

Despite growing hopes that the US backs a new round of world trade liberalisation talks, the Bush administration has suffered a setback in its battle for a fast-track negotiating mandate. Robert Zoellick, the top US trade official, has back-tracked from earlier plans to combine requests from Congress for authority to negotiate two-way, regional and multilateral agreements.