WTO talks plan agreed in Davos

Trade ministers meeting in the Swiss mountain resort of Davos have put world trade negotiations back on track, agreeing a timetable for negotiations on the most contentious issues.

The timetable must be approved by all World Trade Organisation (WTO) members but ministers were confident that it represents a realistic route towards concluding a trade round by the end of 2006.

Negotiators from the European Union, the United States and more than 20 other countries met for three hours during the Annual Meeting of the World Economic Forum. US trade representative Rob Portman said the ministers agreed to proceed on a number of different fronts at once rather than remaining bogged down in a bitter disagreement over agriculture.

"Today it is fair to say that there was consensus for the first time that all pieces of the puzzle need to come together at once," he said.

WTO secretary general Pascal Lamy said that completing the trade round, known as the Doha Round, by the end of this year was like trying to fix a Rubik's cube with 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.

EU trade commissioner Peter Mandelson said the mood among negotiators had improved but he said that Europe needs to see progress towards tariff cuts for industrial goods and services if it is to show flexibility on other issues.

"The first principle of negotiating is that the person you are negotiating with must have something to lose by walking away. At the moment, there is an imbalance on the table. There is not much on the table for Europe to lose," he said.

The timetable agreed in Davos would see accelerated negotiations on 33 contentious issues, moving at the same time on agriculture, services and manufacturing. The Doha round was intended to benefit developing countries and Mr Portman claimed in Davos that agreement would lift millions out of poverty.

Ghana's trade minister Alan Kyerematen warned, however, that many developing 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.

Brazil's foreign minister Celso Amorim noted that few of the business leaders in Davos attended the World Economic Forum's sessions on trade, suggesting that they had gained all they needed from the multilateral trading system. "Most of the things the business people in the rich world wanted, they got in the Uruguay Round," he said.

Mr Amorim said that, although agriculture was not the only issue that was preventing agreement, it was the central issue.

The EU has agreed to abolish farm export subsidies by 2013 but remains under enormous pressure to reduce tariffs on agricultural imports.

Mr Mandelson said in Davos that the main beneficiaries of such a move would be strong agricultural exporters, such as Australia, rather than the world's poorest countries.