US under pressure to make concessions ahead of Seattle

Date: 25/11/1999

By Simon Taylor

US PRESIDENT Bill Clinton will have to offer developing countries a substantial package of trade concessions to avert the threat of deadlock at next week's ministerial meeting in Seattle, according to trade officials.

Diplomats from EU member states and other major trading nations are warning that unless Washington abandons its reluctance to accommodate developing countries' concerns, trade ministers will face an uphill struggle to agree an agenda for the new round of global talks at their four-day meeting, which starts next Tuesday (30 November).

“The European Commission is worried about developing countries' attitude in Seattle. They think that India and others could block the round unless they get something more in line with what they want,” said one.

Trade officials say both Brussels and Washington are struggling to find a formula to satisfy the developing countries' demands for better market access for textiles and concessions on copyright rules. “This is a serious problem but neither of the two big players have a strategy for how to deal with this,” said one.

The US has until now refused to sign up to a EU-designed package which would scrap import tariffs on goods from 14 of the world's poorest countries. But trade experts are hopeful that Clinton will unveil a raft of measures in Seattle aimed at persuading the developing countries to drop their opposition to launching a new round.

The US President boosted hopes of significant concessions at the 11th hour when he announced recently that he planned to attend the talks, signalling that he would invest enough political capital to make the meeting a success. He has, however, been forced to abandon attempts to persuade European leaders to join him after the idea was given a cool reception.

EU officials fear that a group of developing countries led by India, Pakistan and Egypt could jeopardise hopes of agreeing an agenda because they want to reopen negotiations on deals struck in the last round in areas such as textiles and copyright rules.

Efforts to address these demands have failed so far because political lobbying in the US, especially from the textiles industry, has prevented the Clinton administration from offering extra concessions. Officials claim that Washington is refusing to re-examine any agreements struck as part of the last round amid concern that it would be accused of failing to defend US industry's interests vigorously enough.

The Union has made it clear that it will not offer unilateral concessions on textiles, pointing out that the US has much higher import tariffs on textiles than the EU. The Commission itself has very little room for manoeuvre because member states with vulnerable textile sectors such as Portugal and Greece are opposed to any deal which could harm their industries.

Pessimism about the chances of a deal in Seattle intensified this week when trade envoys in Geneva abandoned their attempts to reach agreement on a draft agenda. Concern was also fuelled by warnings from Trade Commissioner Pascal Lamy that the outcome was in doubt.

Lamy called on the US to take a longer-term approach to the new round, warning that if it failed to do so, there would not be enough momentum to conclude the talks in the face of opposition from campaign groups. “The US administration has a shorter time horizon than ours. If we do not deal with new issues, movements against globalisation will be stronger than today,” he said.