US plays down hopes of trade breakthrough in Davos
2007-01-25

Category Trade World Trade Organization World Economic Forum Nations Switzerland Brazil City Geneva

US Trade Representative Susan Schwab has played down hopes of a breakthrough at a meeting on deadlocked global trade talks this weekend but said progress was being made.

"I don't think we're looking at a breakthrough in the near term," Schwab told AFP Thursday on the sidelines of the World Economic Forum in the Swiss resport of Davos.

"But I think we're making some progress and some of the key players really are engaging -- Brazil, the EU, the United States and other countries -- and that makes me cautiously optimistic that we are laying the groundwork for a breakthrough," she added.

Ministers from about 30 key trading nations are due to meet World Trade Organisation Director General Pascal Lamy in Davos on Saturday.

Lamy suspended the five-year old negotiations between the WTO's then 149 members on reducing barriers to trade in agriculture, industrial goods and services last July because of the deadlock.

However, diplomats at WTO headquarters in Geneva were allowed in November to resume contacts over technical details of a long delayed trade deal, and negotiators from major players have met each other repeatedly since then.

A senior EU official close to European Trade Commissioner Peter Mandelson said on Wednesday that there were hopes of a "political signal" from the meeting in Davos to relaunch negotiations, rather than a breakthrough.

Schwab said Thursday: "I know there are issues within the EU that have to be resolved."

The round is deadlocked because of differences between the EU and US on agriculture, discord between rich and poor countries about farming subsidies, while industrialised nations are seeking greater access to developing nations for their industrial services and goods.

Some ministers were due to hold indvidual bilateral meetings in Davos.

Indian Minister of Commerce Kamal Nath, who is also in Davos, said in an interview with the Financial Times Thursday that the United States and the EU needed to give ground.

"I have told the US and the EU that they must both converge," Nath told the newspaper, adding that the Davos meeting was not about negotiations.

"The starting point cannot be a ministerial."

Nath notably reiterated a complaint about US farm support that he made when a meeting at WTO headquarters in Geneva collapsed in acrimony last summer.

"If the US seeks market access for its subsidised products it will result in more market access for subsidy flows, not trade flows," he said.

A US official had said earlier this week that negotiators from Washington and Brussels were making prgress on a bilateral deal that could help break the impasse at the WTO.