Bush says world trade talks "tough sledding"
2006-06-15

Category Free Trade European Union Trade World Trade Organization Nations Switzerland India Brazil South Africa Netherlands Austria U.S. China City Geneva People George W. Bush

President Bush warned on Thursday of trouble in world trade talks and urged Europe to make a difficult decision on lowering its protections for farmers that Washington is prepared to match.

Bush said Doha Round talks aimed at a global trade agreement had reached a critical moment.

"It's tough sledding right now," he told a conference of business leaders on fighting global poverty.

The 149 members of the World Trade Organization are running out of time to reach a deal to reform trade-distorting farm tariffs and subsidies as part of attempts at a wider pact to slash all trade barriers and boost the world economy.

WTO Director-General Pascal Lamy has set a June 30 deadline for countries meeting in Geneva to agree on basic formulas for cutting farm subsidies and reducing agricultural and manufacturing tariffs that have eluded negotiators in more than four years of talks.

Bush said he understood that in many countries, the pressures of local politics were making it hard for countries to agree to concessions.

"National interests seem to be more important than reducing barriers and tariffs across the world," Bush said, but he added that free trade would not only help growth in developed countries but was also a crucial tool in fighting global poverty.

He spoke just after participating in a ceremony to swear in Susan Schwab as the new U.S. Trade Representative.

AGAINST PROTECTIONISM

Both Bush and Schwab have been cautioning against protectionist sentiment at home at a time when fears of losing more U.S. jobs to China and other low-wage countries have eroded support among Americans for open trade.

"The tendencies are to say, let's just wall ourselves off from competition," Bush said. "But if we become a protectionist nation, if we lose our confidence and our capacity to compete in the global economy, it will make it much harder to achieve the common goal of reducing global poverty."

In the WTO talks, the United States argues that very deep farm tariff cuts are needed to ensure an agreement actually results in new trade flows.

The European Union has called the U.S. tariff demands unrealistic, while also urging Washington to offer deeper farm subsidy cuts than it has so far.

Bush said major developing countries such as Brazil, India, China and South Africa in the Group of 20 have a choice to make on manufacturing.

"In my view countries in Europe have to make a tough decision on farming, and the G-20 countries on manufacturing, and the United States is prepared to make a tough decision along with them. That's my message to the world," Bush said.

He said he would carry the message to Europe next week when he attends a U.S.-EU summit in Vienna, Austria.

U.S. farm groups have grown concerned they may not gain enough business from a world trade deal to make up for subsidy cuts the United States has already offered.

They have urged Bush to scale back the U.S. offer if others do not come forward with the tariff cuts that the United States is demanding.

The standoff over farm subsidies and other issues has imperiled the trade talks. WTO members need to agree on core agricultural, manufacturing, services and other issues by the end of July to get a final deal through the U.S. Congress by mid-2007.

(Additional reporting by Steve Holland and Matt Spetalnick)