Talks on global trade deal show first sign of progress

TALKS AIMED at securing a global trade deal made good progress yesterday, raising real hopes among negotiators that a deal may be possible despite seven years of deadlock, writes Jamie Smyth.

EU trade commissioner Peter Mandelson emerged from five hours of talks with negotiators from six other major trading blocs in a much more optimistic mood than before.

"There has been progress made, yes . . . it's possible," Mr Mandelson told reporters when asked whether the basis for a World Trade Organisation (WTO) agreement could still be found.

A WTO spokesman also reported "encouraging signs of progress" and "some very interesting ideas" after five days of tough negotiations aimed at liberalising world trade.

Negotiators from the seven biggest blocs narrowed the gap between the demands of developed economies such as the EU and US and developing economies such as India and Brazil over farm subsidies and industrial tariffs.

They also agreed elements of a compromise paper prepared by WTO director general Pascal Lamy, balancing tariff cuts on farm imports into the EU and US with the provision of further access to developing economies' markets for the EU and US.

EU sources said the compromise would still protect the union's red lines on agriculture, which include designating beef as a sensitive product that can be protected from foreign imports. The draft proposal would see import tariffs cut by 23 per cent for beef compared to the standard cut in tariffs for farm products of 70 per cent.

In return for maintaining higher tariffs the union must agree to accept a quota of non-EU beef at a low tariff. The latest proposal is for this quota to be set at 290,000 tonnes annually, which is at the lower end of a sliding scale that could run up to 450,000 tonnes.

News of possible movement in the WTO negotiations prompted an angry response from the Irish Farmers' Association (IFA). It described the compromise as a "last ditch attempt to cut a deal at any price".

"I am urging the Taoiseach and the Government not to hesitate to use the veto . . . Any WTO deal must not undermine our agricultural interests," said IFA president Pádraig Walshe, who has warned that EU tariff cuts will flood the union with Brazilian beef and cost 100,000 jobs in the agribusiness and farming sectors.

But Ibec has urged the Government to take a more positive approach. "It is vital that business interests are given their rightful place in negotiating priorities at the WTO," said Ibec head of trade and international relations Pat Ivory. He added that developing economies needed to make a move to open their markets to European industrial imports.

Following the more upbeat meeting of the seven biggest economies, the new compromise proposals were considered by the 35 ministers representing the wider WTO membership late last night.

It is possible that the outline of a deal could be agreed by Tuesday.