Mandelson in call to rescue world trade talks

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The Independent Online

Peter Mandelson, the European Union trade commissioner, has warned about the consequences if the Doha round of world trade talks were to fail this year.

Mr Mandelson pointed to the approaching US elections as the effective deadline for the consummation of the negotiations, after which the delays associated with the new American administration would effectively kill the process.

A new president would inevitably need to review the negotiations, and Mr Mandelson thought that the Doha round was unlikely to be at the top of their in-tray. The process of appointing, nominating and gaining congressional approval for new trade officials could also take many months.

At the World Economic Forum in Davos, Mr Mandelson said that while 2007 had been called a "year of opportunity", 2008 would be "the year of necessity". He added that he had been struck by business figures who had felt "frustrated" by the length of time taken (the Doha round was launched in 2001), and who perceived that "the level of ambition has fallen". He said that they had urged him not to give up, but also not to allow the negotiations to "linger on" and to give them a "decent burial".

Mr Mandelson suggested that if the Doha round were to be abandoned, economically valuable elements already agreed could be extracted from it, such as a package of development aid. Even so, he was sceptical about the extent to which such "cherry-picking" might be possible.

Mr Mandelson said that "the caravans would move on" if an agreement were not reached in 2008, with countries and trading blocs moving to a series of bilateral treaties in place of the Doha round. These, he conceded, would be beneficial, but still be "no substitute" for a comprehensive multilateral arrangement which would more firmly build in the gains for free trade that have been made in the past few decades.

Since the onset of the credit crisis and the general slowdown in world economic growth, political pressures for protection have been growing, particularly in parts of Europe and the United States. Opposition to sovereign wealth funds and calls for tighter regulation of financial markets are two examples of how recent economic events have fuelled resistance to trade liberalisation.

Last month, Mr Mandelson attacked Hillary Clinton, the US presidential candidate, over her attitude to free trade. He described Mrs Clinton's views on global trade as "disappointing", "misplaced" and symptomatic of a new trend towards protectionism in the West.

In recent days sources close to Mr Mandelson have suggested that more progress was being made than the public realised, and expressed hope that the certainty of a change of incumbent in the White House would force the pace of change.

For her part, the US trade envoy, Susan Schwab, reiterated the commitment of the Bush administration to the success of the talks. The Indian Minister for Trade and Commerce, Kamal Nath, said that he was prepared to negotiate on commerce, but would not do so in matters of "livelihood and security".

Arguments about the level of agricultural subsidies in the West and the willingness of developing nations to open up their markets in services have bedevilled the talks for some time, despite evident goodwill on the part of most of the participants. Informal meetings of 25 trade ministers plus the World Trade Organisation chief, Pascal Lamy, and Mr Mandelson over the weekend do not appear to have resulted in a breakthrough.

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