KEY POINTS:
Trade Minster Phil Goff has gone from being pessimistic about the prospects of a successful conclusion to the Doha trade round to giving it an even chance of success.
"But I won't put it beyond that until we have some further agreement on the critical issues."
Goff returned yesterday from a World Economic Forum gathering in Davos, Switzerland, where around 30 trade ministers discussed progress in informal talks between the Americans and the Europeans since the new year.
There has been enough movement for World Trade Organisation director-general Pascal Lamy to announce the formal resumption of the talks, suspended last July.
Goff said US Trade Representative Susan Schwab and European Union Trade Commissioner Peter Mandelson had both expressed to him "a degree of optimism that they could move forward".
"But while I think there is important progress, we are still way short of a breakthrough in the talks and there are still critical issues that have to be resolved."
The negotiation round launched in Doha in 2001 seized up last July for want of movement by Europe on agricultural market access, by the US on reducing farm support subsidies, and by major developing countries on opening their markets in manufactured goods.
"The US has always acknowledged it could move to cut its trade-distorting measures - the figure most often used being from $22 billion to $17 billion. And the EU has moved its original October 2005 offer of a 39 per cent tariff cut to something like 50 per cent."
The key now, Goff said, was how much flexibility the major players had in relation to sensitive products, "and what the overall figures might have to be to allow real trade flow in areas of key interest to the US".
Trade Liberalisation Network chairman Stephen Jacobi welcomed the signs of progress but warned of the risk of a quick and dirty deal that sidelined areas of importance to New Zealand like dairy products for the sake of getting an agreement before the US Government's negotiating authority from Congress expires on June 30.
Goff said dairy was a sensitive product, "and on the headline numbers we don't get a great deal from the tariff reductions. But we do get a significant amount from abolition of export incentives, and we benefit from the [EU] Common Agriculture Policy reform which is occurring, and we hope the reform that will occur in the United States will reduce subsidies and therefore the level of output from the developed world."
Goff understood the US Administration was committed to getting renewal of its negotiating mandate from Congress, the trade promotion authority (TPA).
In a recent op-ed piece in the Wall Street Journal Senator Max Baucus, incoming chairman of the powerful finance committee, disputed the idea that the new Democratic majority would be bad for trade policy, though he said any renewed fast track authority would need better provisions on labour and the environment and on "enforcement".
Goff said "whether TPA goes through would be immeasurably assisted by evidence that the Doha Round was moving forward. Without that there would be much less incentive for Congress to pass the measure."
Tim Groser, National's trade spokesman and former chair of the WTO's agricultural trade negotiations, said an indication of further flexibility from key developed and developing countries was vital.
"But that indication still needs to be communicated to their negotiators in Geneva, along with firm instructions that they want the deal done and are prepared to ditch their earlier more one-sided negotiating positions to get it. If not, this promising opportunity will disappear without trace ... just like some earlier promising opportunities."
Doha Resuscitated
* US and Europe give some ground on agricultural market access and subsidies.
* But no breakthrough yet, says Phil Goff.
* Runs on the board needed before the US Government's negotiating mandate runs out.
