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"Everyone stands to lose if trade round fails"
Negotiators agree that much work is needed to keep on track

28 January 2006 - Davos, Switzerland

If the current round of trade negotiations doesn’t come together, everyone stands to lose. This was the message delivered by Washington at the World Economic Forum Annual Meeting 2006 to both developed and developing countries as they grapple with the huge issues still open in trade liberalization talks. Panellists generally agreed that there is much work to do before the 30 April deadline set by trade ministers in Hong Kong to agree on cutting tariffs and subsidies in agriculture and manufactured goods.

Both Peter Mandelson, Commissioner, Trade, European Commission, Brussels, and Robert Portman, US Trade Representative, agreed they see what Portman called a “different spirit emerging”, following a private meeting today organized by the Swiss government. Mandelson urged all players to capture and use the spirit emerging from the meeting and maximize the better “mood music”. Portman praised this turn and encouraged all countries to work together, but cautioned that if the current round fails, everyone stands to lose.

Pascal Lamy, Director-General, World Trade Organization (WTO), Geneva, compared the negotiating process to aligning a Rubik’s cube using 150 pairs of hands. “The reality is that we need to sequence things. Two colours – agriculture and industrial tariffs – must come together. The major players are here. On agriculture, the EU will have to move on market access and the US will have to move on domestic subsidies. Japan and Switzerland will have to do both,” he said.

There is just one year to put together what the world trading system will look like over the next 10 years, he said. Lamy stressed that agricultural tariffs will have to be reduced; it is only a question of how much as compared to the price developing countries will have to pay in other areas.

Alan Kyerematen, Minister of Trade, Industry and Presidential Special Initiatives of Ghana, warned that increasingly, many countries are becoming disillusioned about whether the multilateral trading system can deliver on its promises. “WTO members have failed to put development at the centre of the negotiations,” he said. The Minister called for greater convergence in the respective EU and US positions and on developing countries to better align their common interests.

Lamy responded that the present multilateral system – with rules and dispute-settling mechanisms –is fairer than any other system for developing countries. “Developing countries have a say regarding balancing the system in their favour because they represent two-thirds of the membership,” he pointed out.

Notes to Editors:
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Last updated: 28 January 2006
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