Doha trade round lost if no deal by July

LONDON Wed May 25, 2011 4:31pm IST

Shipping containers stand stacked at the Container Terminal at the Cochin Port on Willingdon Island in Kerala July 27, 2009. REUTERS/Sivaram V/Files

Shipping containers stand stacked at the Container Terminal at the Cochin Port on Willingdon Island in Kerala July 27, 2009.

Credit: Reuters/Sivaram V/Files

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LONDON (Reuters) - World leaders have just two months to clinch a global free trade agreement before the long-running Doha round is declared a failure, said former World Trade Organisation Director-General Peter Sutherland.

Negotiators had an effective deadline of July to find a deal for ministers to sign when they meet in Geneva at a WTO summit in December, Sutherland told Reuters in an interview.

"They can continue trying but it will be very difficult to do anything if they haven't broken the back of this by July," said Sutherland, who is also a former European Commissioner.

The marathon Doha round of talks has stalled over attempts to cut rich country farm subsidies and reduce tariffs on manufactured and agricultural goods.

Sutherland said the end of 2011 was widely seen as the final deadline for the Doha round, launched a decade ago in Qatar with the goal of helping poor countries prosper through trade.

Prolonging it beyond 2011 was not a credible option as it would run into the 2012 U.S. presidential election campaign, a no-go zone for trade talks.

"Everybody agrees that it will be impossible to get a conclusion from the (U.S.) presidency in an election year," said Sutherland.

"The United States is a key element in the global trading system, so everybody accepts the end of the year is the definitive moment for the conclusion of the round. Either it's done after 10 years or it isn't," he added.

Sutherland's concerns were echoed by British trade minister Stephen Green in an interview with Reuters Insider television.

Trade ministers are due to address the Doha impasse ahead of a meeting of G8 leaders on Thursday in the French seaside resort of Deauville, where the progress of the trade talks will be discussed.

"We are of the view something has to be done this year. It's five to midnight. I do think if we fail collectively this is something historians will note as a serious failure of the world community," Green said at the annual meeting of the Organisation for Economic Cooperation and Development in Paris.

"We are doing our level best to keep a general strategy of opening our world markets up clearly in the forefront of everyone's minds."

LEADERSHIP DEFICIT

Sutherland was speaking ahead of Wednesday's publication of a report on the Doha round commissioned last year by Britain, Germany, Turkey and Indonesia.

The report, which he co-authored with trade economist Jagdish Bhagwati, said the Doha round had moved from "lasting progress to imminent and permanent failure", blaming the crisis on a "deficit of political leadership".

Sutherland said the round would founder unless political leaders, particularly in the United States, China, Brazil and India, demonstrated they were committed to closing the gaps between their negotiating positions.

But he said they seemed more interested in preparing for the blame game that would follow the Doha round's demise.

"I don't see the concrete evidence of real movement by any of the major players over the last four or five months, which is very disappointing," he said.

"Everybody says they are doing everything they can, which is palpably not true. It's the usual line, which is prepared for failure, so that everybody can then indulge in the usual game of finger-pointing," he said.

Sutherland dismissed hopes that ministers from the WTO's 153 member countries could themselves find an eleventh-hour compromise at their December summit to complete the Doha round.

"I think it is already close to being too late. If it isn't effectively on the table they are not going to do it at the last minute," he said.

(Additional reporting by Nia Williams; Editing by Michel Rose)

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