WTO battles for compromise

By BRIAN FALLOW

WELLINGTON - Seattle, long famous for coffee, risks becoming a byword for waffle as well, as trade ministers cast about for semantic compromises and procedural stopgaps which will allow them to pronounce their World Trade Organisation meeting a success.

In the especially vexed area of agriculture it appeared for a time yesterday that a form of words acceptable to both the European Union and the United States had been arrived at.

But a draft text calling for "substantial reductions in all forms of export subsidies ... in the direction of progressive elimination of export subsidies" was rejected by the Europeans, apparently because it still contained the "e" word, elimination.

Labour's trade spokesman Jim Sutton, who flew back from Seattle to bolster the Labour right in key caucus elections for the Cabinet, said such nit-picking was inevitable and remained confident a compromise would be reached.

"The Europeans' objections, when you get right down and talk with them, didn't seem to me so entrenched as to indicate we weren't going to be able to achieve some compromise, some satisfactory position," Mr Sutton said.

"In an area where there are such interests in conflict you are not going to get sudden, dramatic movement.

"You have to take small steps where you can."

On the issue of involving labour rights in trade talks - something US President Bill Clinton has urged but developing countries, including China, fear as back-door protectionism - reports from Seattle suggested a face-saving fudge was on the cards.

The Wall Street Journal, citing officials involved in the talks, said: "At most, WTO members will agree to look at the relationship between the WTO and International Labour Organisation - which the US can argue involves labour rights and developing countries can argue doesn't."

Elaborating on Prime Minister-designate Helen Clark's comments that more consideration should be given to labour and environmental concerns, Mr Sutton said: "We need to go to more trouble to make sure trade rules are compatible with and reinforce other important sets of international rules such as those governing labour relations, which are primarily the responsibility of the International Labour Organisation."

"We are well aware," Mr Sutton said, "of the danger that selfish vested interests might potentially induce certain governments to introduce barriers to trade on the pretext that they are protecting workers' rights and we have to take care about exposing ourselves to that."

But he said the links between trade and labour and trade and the environment should be looked at in a methodical way within the WTO.

"We support the Clinton initiative on that and we don't see it as being inimical to trade."

On other bones of contention, Reuters reported no progress on anti-dumping, the practice, permitted under current WTO rules, of slapping duties on imports sold at below the cost of production.

The US is under pressure on this question from Japan and others who accuse it of abusing the rules to protect inefficient industries such as steel from fair competition.

But there were advances towards consensus, at least within the WTO.

The EU agreed to a working group on biotechnology, angering environmentalists who accused it of caving in to the US.

Agreement was also reached, Bloomberg reported, on extending for another two years the current moratorium on imposing new taxes on sales via the internet.