Lamy urges flexibility in bid for new trade round

Date: 07/12/00

By Simon Taylor

TRADE Commissioner Pascal Lamy is calling on EU governments to soften their demands for a wide-ranging agenda for global trade liberalisation talks to win support for launching a new round of negotiations next year.

Lamy will urge member states to show more flexibility about the inclusion of competition and investment rules in negotiations on a new round in consultations this month. He also will ask for more understanding towards developing countries' problems in meeting their trade commitments.

"I believe the time has come to think about a new formulation for our position," the Commissioner told a meeting of EU trade ministers last weekend. "We must get ready to go further towards a position acceptable to less developed countries as it is clear that these countries are not yet convinced about the benefits of a new round."

Lamy's comments are being seen by trade experts as the biggest admission yet by the Union that it is isolated in its call for a wide-ranging agenda for World Trade Organisation talks covering competition and investment. If EU governments accept Lamy's arguments, it would be a victory for the US, which has always argued that tacking anti-trust and investment onto the WTO agenda could scupper hopes of an agreement on a full round. "These are very important issues for the WTO but we have always questioned whether they are ripe for negotiation," said one US official.

Officials played down suggestions that Lamy was trying to adjust the Union's position to accommodate the likely winner of the US presidential election, George W. Bush. An administration led by the Republican candidate would almost certainly oppose the Union's wish list for WTO talks not just on anti-trust and investment rules but also labour and environmental standards. "The world is telling Lamy he has got to send a signal to compromise a little," the official added.

But France and Germany have voiced opposition to the Commissioner's call for a rethink of the EU's stance. At last weekend's ministerial meeting, they vowed to fight any attempt to water down the Union's commit-ments to link labour and environmental standards in the forthcoming round.

Commission officials say Lamy does not want the EU to drop its call for anti-trust and competition rules to be covered. Rather, he wants the Union to show WTO members that it could accept a commitment to discuss common rules without insisting on a fully-fledged agreement as part of the final deal on a new round.

Lamy argues the EU should also tone down its demands for agreement on all areas before a final trade deal can be reached. Instead, the bloc could approve partial deals, such as on greater market access, before completing talks on all aspects of a round. The US has long argued for this 'early harvest' approach.

The Commissioner is also calling on member states to show more flexibility towards developing countries to win support for a new round. Poorer nations have said they will not agree to new talks without concessions from industrialised countries on meeting their commitments under the 1994 Uruguay Round agreement.

They want the leading world powers to bring forward plans to liberalise textiles markets, scrap 'unfair' anti-dumping rules and extend the deadlines for complying with WTO agreements on intellectual property and investment measures. But officials say Union governments would be reluctant to make any further concessions.

Trade Commissioner Pascal Lamy is calling on EU governments to soften their demands for a wide-ranging agenda for global trade liberalisation talks to win support for launching a new round of negotiations in 2001.