WTO talks look odds-on for success says Sutton

By BRIAN FALLOW economics editor

Chances of a successful launch of a new world trade round in Doha, Qatar, on Friday are better than 70:30, says Trade Negotiations Minister Jim Sutton.

"There is a stronger degree of consensus than you would normally get in a committee of 142," he said.

US Trade Representative Robert Zoellick and his European counterpart, Pascal Lamy, had been working closely - so closely that they had to be careful they were not seen as stitching up a deal, Mr Sutton said.

"In the area of agriculture New Zealand seeks substantial improvements to market access through reduced tariffs and expanded quotas, the elimination of all forms of export subsidies and substantial reductions in other trade- and production-distorting support."

The draft text to be put to the trade ministers in Doha by the WTO secretariat does not go that far.

It talks of "reductions of, with a view to phasing out, all forms of export subsidies".

Mr Lamy has been saying that is still more than the Europeans can accept.

The timetable for a phasing-out would be a fertile area for compromise, Mr Sutton said.

The draft text also talks about taking into account non-trade concerns in the agriculture negotiations, code for the longstanding European and Japanese position that agriculture is not just about producing food but maintaining the social viability of rural communities and the environmental values of the countryside.

"We need to acknowledge that these are perfectly legitimate public policy initiatives," Mr Sutton said.

"Agriculture policy has to be consistent with policies to support rural communities and environmental values. It's just that when countries like New Zealand address them we don't do it through agricultural subsidies."

Also in New Zealand's sights for this trade round is progress over fish and forest products.

It is common for countries with low tariffs on average to have high barriers against fish and forest imports, or low tariffs on unprocessed logs but much higher ones on value-added timber products.

Mr Sutton said another failure to launch a round did not bear thinking about.

If there was no launch this year it would be much more difficult next year, because of elections in the United States, France and Germany.

"Trade negotiations are difficult when they coincide with elections, simply because negotiations are about trading off interests," he said.

"So those who fear their interest will be traded off get very busy in the elections."