EU negotiates bilateral trade deals but hopes for Doha revival

The European Union is pursuing bilateral trade deals with Asian, Latin American and Gulf states with increased emphasis on market access.

But these deals will not conflict with any World Trade Organization (WTO) agreement if world trade talks get back on track, according to David O'Sullivan, the European Commission's director-general for trade.

Five years of negotiations on the WTO Doha round, which focused on development, collapsed in Geneva on Monday (24 July) after the major players refused to budge from entrenched positions.

No dates have been set to try to revive the talks and much will depend on domestic political events in the autumn, such as the US mid-term Congressional elections and the Brazilian presidential elections.

O'Sullivan said the bilateral negotiations would be pursued whatever befell the WTO talks. "If Doha succeeds we'll still go ahead with the bilaterals because they would be top-ups. They are all WTO-plus agreements that we're looking at - it's just a question of which WTO they are plus to. Are they plus to the status quo WTO or are they plus to the Doha round WTO?" he said.

The EU is close to reaching a free trade agreement with the Gulf Co-operation Council - involving the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. An EU-Latin American summit in May kicked off negotiations for a free-trade agreement with Central America and the Andean Community of Bolivia, Colombia, Ecuador and Peru. A deal with Mercosur - Brazil, Argentina, Uruguay, Paraguay and Venezuela - which was stalled back in 2004, may now come back on the table.

A 'vision group' exploring the possibility of a free trade deal with the countries of the Association of South-East Asian Nations (ASEAN) has been positive towards the prospect in a first report.

An EU summit with India in October may also open up the possibility for a trade deal and an update of a previous political and economic accord with China is expected at a summit in September, but will not involve a free trade deal.

The Commission already has a mandate from the member states to negotiate deals with the Gulf Co-operation Council, Mercosur and China but mandates must be sought for deals with ASEAN, India and South Korea.

There is a shift in emphasis about what these deals should now be about. "There is a sense among the member states that they would like to use future free trade agreements more for the purpose of getting additional market access and additional economic advantages and less for purely developmental, neighbourhood or political motivations," said O'Sullivan.

Peter Mandelson, the European commissioner for trade, said this week that the EU would prefer to achieve a multilateral trade deal. "The EU is not giving up on this round. We have stuck with it, paid into it, given a lot, indeed given more than others. We will continue to do so because it is right and fair to do so towards the developing world, as well as in our own economic interests," he said.

The other countries involved in the final talks to broker a deal at the WTO - the US, India, Australia, Japan, Brazil - are also pursuing bilateral deals.

The US has prioritised Malaysia, South Korea and Thailand for bilateral free trade negotiations in Asia and is also pursing the United Arab Emirates, Panama, Ecuador and a number of countries that make up the Southern African Customs Union.

The European Union is pursuing bilateral trade deals with Asian, Latin American and Gulf states with increased emphasis on market access.