The New York Times

Tuesday, November 23, 1999

WTO Envoys Pass Trade Buck to Ministers

By Reuters

GENEVA (Reuters) - Deadlock on agriculture and demands from developing countries for more time to put existing accords into effect on Tuesday forced negotiators in Geneva to drop efforts to shape a new global trade round.

Instead, they agreed to pass the task on to trade ministers from the 135 member states of the World Trade Organization (WTO) who meet in Seattle from November 30 to December 3.

``It will be up to our political bosses to make the necessary decisions,'' said Ali Mchumo, Tanzanian ambassador to the WTO and chairman of the body's ruling General Council, who has been steering high-pressure talks on a ministerial declaration.

The declaration, to be issued on the last day of the Seattle gathering, was to be a blueprint for a ``Millennium Round'' aimed at speeding the dismantling of barriers to world trade in goods and services.

Opinion among key envoys and officials was divided on whether the ministers, faced with a rambling ``all things to all men'' text of 32 pages, could do in four days what their negotiators had failed to do in three months.

``I just don't see how we can get anything with any real prospects going for next year,'' said one diplomat, who asked not to be identified. ``Perhaps we should just freeze it for a while.''

WTO CHIEF SAYS SEATTLE WILL NOT FAIL

In more upbeat mode, WTO Director-General Mike Moore told a news conference: ``I believe it will be done. Seattle will not fail.'' Too much was at stake, including the potential creation of many new jobs around the world, he declared.

The United States' feisty trade ambassador Rita Hayes took a middle position, saying it was going to be ``very difficult'' for the ministers but adding: ``I am sure they will get there.''

The European Union's envoy Roderick Abbott, rejecting claims by members of the 15-nation Cairns Group of farm produce exporters that Brussels was responsible for the Geneva blockage, said the process ``is now very confused.''

And at EU headquarters in the Belgian capital, Trade Commissioner Pascal Lamy suggested that even if some compromise accord was reached in Seattle a new round would not get far unless new issues were tackled.

These issues, which Brussels wants on the agenda, include how to integrate labor standards, competition and investment policies as well as the environmental impact of trade into the rules all WTO members agree to observe.

But their introduction to the WTO agenda is stoutly resisted by developing countries.

U.S. TOUGH ON LABOR ISSUE

Washington is even tougher than Brussels on the labor issue, asking for full WTO discussions on the implications for ``fair trade'' of lower worker salaries in emerging economies.

However, the main obstacles to agreement in Geneva were the vexed issue of farm subsidies and the reluctance of most poorer countries to take on new liberalization commitments.

The Australian-led Cairns Group and the United States want the European Union and Japan to agree to a clear time-frame for ending farm support.

The EU and Japan -- backed by South Korea, Switzerland and Norway -- say agriculture has a ``multifunctional'' task including protecting the environment and maintaining rural life, meaning farm produce cannot be treated like industrial goods.

Although the EU and its allies want a broad round including negotiations on lowering tariffs on industrial goods, the United States wants to keep the effort more limited to ensure it is concluded in three years.

But developing countries on Tuesday issued a statement arguing that richer powers had failed to open up their markets as promised in the 1986-93 Uruguay Round accords, and saying any major new commitments are unacceptable.

They want to reopen Uruguay Round accords to win more time to adapt their laws and markets to their impact.

The United States has firmly rejected this demand.