WTO faces huge task to deliver on trade promises

1.00pm

GENEVA - The World Trade Organisation (WTO), its credibility restored now its Doha Round is back on track, still faces a huge task to deliver on promises of freer global trade, officials admitted on Sunday.

A last-ditch deal between the WTO's 147 members, setting out key guidelines for more work, prevented a potentially fatal failure for the round with its offer of deep cuts in rich power farm subsidies and more open markets to boost world growth.

"The multilateral trading system is alive after a period of doubt," said European Union Trade Commissioner Pascal Lamy, whose pledge to eliminate the bloc's hugely controversial farm export subsidies helped pave the way to the pact.

The Doha Round, launched in late 2001 with the world still reeling from the suicide plane attacks in the United States, aims to lower barriers to commerce across the global economy.

Its conclusion, the World Bank says, could lift hundreds of millions of people out of poverty and inject billions of dollars into a still fragile international economy.

However, the round was derailed 10 months ago when bitter rows between rich and poor nations, particularly over the former's lavish farm subsidies, triggered the collapse of a ministerial conference in Cancun, Mexico, raising fears negotiations would never resume.

In Geneva, the WTO did what it failed to do in Mexico.

"I said in Cancun it (the multilateral system) was in intensive care ... today not only is it out of hospital, it is up and running," Lamy told reporters.

The round was due to conclude by the end of 2004, although few ever took that deadline seriously. But after the latest accord, Lamy said it could be done by the time ministers meet again in December, 2005, in Hong Kong.

While analysts and business organisations applauded the Geneva deal, which came only after five days of almost round-the-clock wrangling, they warned that the framework accord was short on detail and put off many of the hardest decisions.

"It is clear from the ambiguity ... that important and difficult decisions have been deferred," the National Foreign Trade Council, a US business lobby, said in a statement.

British based advocacy group Oxfam, which campaigns on behalf of poor nations, was equally cautious about how far it went towards achieving the round's supposed main goal of promoting development.

"We are three years into negotiations, yet the results of this meeting fall far short of what is needed to reform world trade rules so that they work for the poor," said Celine Charveriat, head of its Geneva office.

In farm trade, the pact lays down principles for how negotiators in Geneva should bring about the planned deep cuts in subsidies, with the understanding that those who subsidise the most make the biggest contribution.

"This is the beginning of the end for (farm) subsidies. Export subsidies will be eliminated first," said Brazil's Foreign Minister Celso Amorim.

The framework lays down similar, although vaguer, benchmarks for industrial goods and services and launches negotiations to harmonise customs' practices to fight red tape and corruption.

There had been concerns that a fresh failure, even if it had not killed off the round altogether, would have delayed any further discussions well into next year because the United States is going to be distracted by presidential elections.

"Today multilateralism has made a minor triumph," said WTO Director General Supachai Panitchpakdi in the early hours of Sunday. "The major triumph will be the day we achieve the Doha Development Agenda," he added, giving the round its full title.

- REUTERS