U.S. hails China's approach in Doha trade talks

GENEVA Wed Dec 8, 2010 5:06pm IST

File photo of the World Trade Organization (WTO) headquarters in Geneva, July 18, 2008. REUTERS/Denis Balibouse/Files

File photo of the World Trade Organization (WTO) headquarters in Geneva, July 18, 2008.

Credit: Reuters/Denis Balibouse/Files

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GENEVA (Reuters) - The United States is encouraged by China's approach in the run-up to intensified talks on a new global trade deal, the U.S. ambassador to the World Trade Organization said on Wednesday.

Now it is waiting to see whether that will be reflected in actual negotiations on the long-stalled Doha round, said Michael Punke, who is also Deputy U.S. Trade Representative.

Punke's comments are one of the strongest signs yet that the Doha round, launched more than nine years ago and deadlocked for much of the past two, could finally come together in 2011.

Leaders at the G20 summit in Seoul and the APEC summit in Yokohama last month called for a conclusion of the deal -- which could boost the world economy by hundreds of billions of dollars by creating new trade flows -- and said next year offered a narrow window of opportunity.

One of the main barriers to a deal has been a call by the United States for big emerging countries like China, India and Brazil to do more to open their markets to competition than is currently on the table.

"We've been encouraged the last couple of weeks and months by a very constructive attitude on the part of the Chinese," Punke told Reuters in an interview.

That "creative and constructive" approach was evidenced in a series of meetings of small groups of key WTO ambassadors to thrash out possible ways of breaking the Doha deadlock, he said.

"But that was brainstorming and so now we're about to find out if that attitude will carry into actual negotiations. And we're hopeful on that front but we also intend to test where we're at," Punke said.

The United States and China are holding high-level bilateral trade talks next week in China, which Punke will take part in.

In Geneva, the WTO's 153 members are holding a packed series of negotiations with different groups of ambassadors and senior officials this month and next, following the G20 and APEC calls.

MIXED SIGNALS FROM INDIA

Washington wants the big emerging economies to negotiate duty-free agreements for individual industrial sectors, such as chemicals or electrical goods, beyond any general cuts in tariffs, something they have been wary of.

China had shown some willingness to consider a Japanese compromise proposal to apply such tariff elimination to baskets of products within a sector, rather than the entire sector, according to Punke.

He said the G20 and APEC summits had sent a very strong political signal that they wanted negotiators to reach a deal.

"Now we've got that political signal we need to sync it up with the negotiating reality," he said "The question is, are we now, post-Seoul, about to enter those negotiations."

The picture in the run-up to the intensified negotiations was less clear with Brazil and India, he said.

Brazil is currently undergoing a political transition following the election of Dilma Rousseff as president and the United States hopes the new administration taking office on Jan. 1 will signal its commitment to a Doha deal, Punke said.

India was sending mixed signals, showing leadership on the negotiations on some days but less so on others, he said.

He said the United States has not yet started real negotiations with any of the three emerging powers that would signal the talks had entered the "end-game."

That is the stage where states start to make trade-offs across the board, for instance seeking greater access for car exports in exchange for cutting farm subsidies, moving on from negotiations within the individual silos of agriculture, industrial goods and services.

Punke said that the United States recognised this would require it to put more on the table as well.

"We would be naive if we didn't believe that the very definition of negotiation is give and take, and we expect and are ready to participate in a process of give and take as part of this move we hope into an end-game," he said.

Asked whether the tight fiscal situation could encourage Washington to offer further cuts in expensive agricultural subsidies, he noted that the United States had already offered dramatic cuts in farm support in the talks.

(Editing by Laura MacInnis)

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