U.S. wary on Doha deal, World Bank says go for it

WASHINGTON/GENEVA (Reuters) - The United States will not agree to a deal in world trade talks unless other countries make better offers to open their markets, two U.S. trade nominees said on Wednesday.

But a forthcoming study from the World Bank argued that proposals now on the table in the Doha round would bring huge gains to the world economy and World Trade Organisation members should stop quibbling over further concessions.

"I believe a good deal is doable. But we will not do a deal at any cost," Michael Punke, President Barack Obama's choice to be U.S. ambassador to the World Trade Organisation, said at a Senate Finance Committee hearing on his nomination.

"From my meetings and conversations with members (of Congress), with your staffs and with various stakeholder groups, I understand very clearly: No deal is better than a bad deal," Punke said in prepared remarks.

U.S. officials have made it clear they want big emerging countries like Brazil, India and China to open their markets more to American businesses for a deal to work.

But there are important benefits from a deal that locked in trade opening already undertaken unilaterally by countries, to prevent them reversing the moves as the crisis fuels protectionism, Bernard Hoekman, one of the authors of the World Bank study, told a presentation at the WTO.

Other major gains range from helping the environment -- boosting sustainable fisheries by cutting excessive subsidies and opening markets to trade in environmental technologies -- to making it easier for developing countries to trade more, said Hoekman, director of the bank's international trade department.

"The value of all this has been revealed to a much greater extent than was seen a few years ago as a result of the crisis," Hoekman said.

NEGOTIATIONS APPEAR STALLED

The Doha round of world trade talks was launched eight years ago to help poor countries prosper through trade.

World leaders recently set a goal of concluding a deal in the long-running talks next year but negotiations in Geneva appear to have stalled.

"Based on the briefings I have received, it is my understanding that the Doha negotiations have made progress on some issues, but the larger stumbling blocks remain unresolved," Islam "Isi" Siddiqui, nominee to be chief U.S. agricultural negotiator, said in prepared remarks.

The World Bank now puts the benefits from cutting farm support and industrial and agricultural tariffs at about $160 billion thanks to better economic analysis, Hoekman said.

But that does not include gains from opening up trade in services like construction, telecommunications and health care, which are hard to measure, although services account for 70-80 percent of rich countries' economies.

And the very large potential gains from trade facilitation -- helping developing countries trade more by removing red tape, improving infrastructure and cutting costs, are also ignored.

Businesses in North America and Europe have been pushing for increased access to emerging country markets in a Doha deal, but Hoekman said that ignored the real benefit of locking in lower tariffs undertaken voluntarily that could still be reversed.

Unemployment is expected to continue rising in many countries for some time even as the global economy picks up bringing a politically sensitive rise in imports.

The deal now on the table would see the average tariff faced by industrial countries on farm produce fall to 12.1 from 14.9 percent, and on manufactured goods to 2.4 from 3 percent. Farm tariffs faced by developing countries would fall to 11.5 from 14.2 percent, and on manufactured goods to 2.1 from 2.9 percent.

"To lock that in would be a really significant achievement," Hoekman said.

(Reporting by Jonathan Lynn in Geneva and Doug Palmer and Roberta Rampton in Washington)

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