Friday, January 26, 2007

Political muscle raises hopes of saving Doha

Davos 2007

Political muscle raises hopes of saving Doha

Davos blog: Groundhog day

Larry Elliott, economics editor
Friday January 26, 2007
Guardian Unlimited

Hopes of a final breakthrough in the long-running global trade talks rose today as President Lula of Brazil joined Tony Blair and Gordon Brown in calling for a speedy end to the stalled negotiations.

Ahead of a meeting of 30 trade ministers in Davos tomorrow, the head of the World Trade Organisation, Pascal Lamy, said the involvement of political leaders and finance ministers had changed the atmosphere of the talks.

"The winds have restarted blowing in the direction of a conclusion of this round", Mr Lamy said this afternoon.

Negotiations on a new round of trade liberalisation started in Doha in November 2001, but attempts to broker an agreement covering agriculture, manufacted goods and services have been beset by crises and broke down in July last year.

The prime minister arrived in Davos this afternoon to urge trade ministers to show enough flexibility over the coming days to allow Mr Lamy to restart the negotiations in Geneva early next month. Earlier Mr Lula had called on the US and the European Union to make concessions in order to get the talks moving.

"We are fighting ... to make rich countries aware that if there is no deal on the Doha round, there will be no point in blaming things on Iraq, or thinking that they can resolve wars by giving out financial help every now and again," he said.

"It's the possibility of growth, creating jobs and distributing wealth that will create a peaceful world," the former trade union leader said in Davos.

Mr Brown said: "It is imperative that we come together and get a deal. The consequences of not getting a deal are that protectionism would rise. People should realise that there are benefits of the deal and there will be real damage if we don't get it."

Mr Lamy said he would be unwilling to restart the talks if there was any risk of a repeat of last July's problems, when hopes of a deal were raised by world leaders meeting at the G8 summit in St Petersburg, only to be dashed when trade negotiators started to discuss the details of a deal in Geneva a week later.

He added that tomorrow's meeting would not provide the vital breakthrough, but the WTO director-general is looking for signs that the main players in the talks are ready to make a deal. Negotiators have spent the past few weeks seeing if they can find common ground, and Mr Lamy said that the technical work together with the political pressure from the top made him confident that an agreement was "doable" over the coming months.

"There is a political energy. It is about more than trade. It is about the geo-political consequences of failure", he said.

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