EU, U.S. business warn against more WTO concessions

BRUSSELS (Reuters) - European and U.S. businesses warned on Friday that the chances of clinching a long-elusive world trade deal will be undermined if more concessions are offered to China, India and other big developing nations.

The World Trade Organisation's Doha negotiations for freer trade around the planet, launched more than six years ago, face a possibly decisive next few weeks.

WTO mediators are due to publish proposals in coming days on how to bridge big differences on farm and industrial goods, which they hope will pave the way for a push by ministers for a breakthrough in June or July.

Business Europe and the U.S. National Association of Manufacturers wrote to WTO chief Pascal Lamy on Friday, urging him "to maintain a strong sense of market access ambition".

European and U.S. makers of cars, chemicals, textiles and other goods are worried their countries will lower import tariffs while big emerging economies could stay protected.

The two business lobbies said they were "particularly concerned" that developing countries would be able to shield some or entire industrial sectors from tariff cuts.

Another worry is potentially long phase-in periods for import tariff cuts by developing nations, especially China which wants special status because it only joined the WTO in 2001.

"For example, the current draft would appear to provide China, the world's second-largest exporter of industrial goods, up to 14 years to phase in its tariff cuts," the letter said.

The Doha round is way behind schedule and risks being put on hold for a further two years or collapsing altogether without a breakthrough soon, as U.S elections loom, negotiators say.

DIFFERENCES REMAIN

In a sign of the differences still in the way of a deal, India's trade minister warned on Friday the round will have little chance of success if it "gets converted to yet another market-access round for the benefit of the wealthier nations."

Brazil, another country in the sights of EU and U.S. negotiators, has said it is unfair to prevent developing nations from protecting industrial sectors when Europe, for example, wants to shield areas of agriculture from tariff cuts.

The Doha round was launched in 2001 to help poor countries export more and to boost the world economy as a whole but it has limped from crisis to crisis as WTO member countries -- now 152 in total -- have wrangled over concessions.

If a Doha deal can be done, it is likely to govern world trade for a decade or two, during which China and India look set to compete with Europe and the United States.

"India is already among the top five exporters of auto parts and it's only a short step to being a finished auto exporter," said Adrian van den Hoven, trade director at Business Europe.

"China is aleady exporting some rather junky cars but (South) Korea and Japan also started out exporting junky cars."

Business Europe and NAM also called on big developing nations to axe or lower tariffs within specific sectors, such as chemicals, as a way to open up markets and said not enough had been done in the Doha round to tackle "red tape" trade barriers.

(Additional reporting by Surojit Gupta in New Delhi)