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Dow Jones Acrimony at trade talks
Worldwide trade talk break off amid complaints about European stance.
November 8, 2005: 10:46 PM EST

GENEVA -(Dow Jones)- Talks among trade ministers from the world's biggest commercial powers to open global markets ended in acrimony Tuesday night.

Ministers broke off talks shortly before midnight in this Swiss city highly critical of what they called an inflexible European Union stance on lowering tariffs on imported farm products.

Very clear was that ministers aren't even remotely close to the consensus they'd need for a landmark accord at a World Trade Organization meeting in Hong Kong next month.

Ministers in the negotiating room said a majority of countries view the E.U.'s stance as the key sticking point to achieving any progress on a global trade deal.

U.S. Trade Representative Robert Portman was especially outspoken against the E.U.'s position earlier Tuesday night.

"The E.U. hasn't gone far enough. That's the general consensus," said Portman. Unless Brussels can promise more tariff cuts, other countries will find it hard to offer bold concessions, he added. Exiting the Tuesday night meetings, he said differences among various countries remain extensive, though he is still hopeful.

Unless Brussels can promise more tariff cuts, other countries will find it hard to offer bold concessions, he added.

A defiant Peter Mandelson said late Tuesday the European Union won't flex any further than it has on agricultural tariffs and subsidies.

Speaking shortly after the meeting of 27 trade representatives, the E.U. Trade Commissioner said he will offer no new concessions to open Europe's farm markets.

"The answer is 'no,'" Mandelson told Dow Jones after the trade talks when asked if Brussels would cave in to pressure to improve its offer on reducing overall agricultural tariffs by an average 38%. That's far short of the 54% the U.S. and other countries are seeking as they try to force open Europe's markets for farm products.

Mandelson entered the Geneva talks with what he had said last month was his best and final offer for reducing agricultural subsidies and opening up Europe's markets to foreign farm products.

France, which receives around 21% of the annual subsidies the E.U. pays out to guarantee farmers' income, placed further shackles on the trade representative entering Tuesday's talks at the World Trade Organization's Geneva headquarters.

In Washington earlier Tuesday, French Trade Minister Christine Lagarde warned Mandelson not to exceed his mandate in negotiations over agriculture subsidies in the Geneva round and repeated a threat to use a veto if France finds the outcome of the talks unacceptable.

With social unrest and riots having spread to over 300 cities and towns across France in the past 13 days, Paris is even less likely than usual to be seen as somehow abandoning its farmers.

Jousting is not only going on between the E.U. and other countries. There are numerous other disputes, highlighting a need for more bilateral talks and dimming prospects for a global trade deal anytime soon.

Ministers engaged in the Doha round of trade talks - called that for the Qatari capital where negotiations were launched in 2001 - are trying to create the framework of a deal to liberalize global trade.

They had been hoping to hold substantive talks in this Swiss city, heading toward a Hong Kong accord.

Instead, they spent much of Tuesday afternoon dialing down expectations for the Hong Kong talks. Their aim was to ensure Hong Kong doesn't end in ruin, as 2003 trade talks in Cancun, Mexico did.

Indian Commerce Minister Kamal Nath said earlier Tuesday, "there just isn't time enough in the light of the divergence" to reach a deal in Hong Kong . More talks will be needed early next year.

Ministers see late 2006 as the final chance for a global trade deal, with U.S. President George Bush's mandate to hammer out an accord ending then. It's unlikely he'd secure Congressional support after that date.

The Geneva talks only started to focus on substantive trade issues after dinner Tuesday night. The negotiations are expected to go on until very late Tuesday.

Brazil wants the E.U. to cut its farm tariffs. India wants to keep high farm tariffs but still wants to get access to services. Japan wants access to industrial-goods markets but still wants to keep high tariffs.

But still, the focus is primarily on the E.U.'s high farm tariffs.

Individual countries are preparing to hold smaller-scale meetings over the coming days. Mandelson is due to meet Brazilian Trade Minister Celso Amorim Wednesday to see if the two sides can't ease part of their deadlock.

Brazil has so far been adamant it will not open its markets to European finished goods such as cars and telephones until the E.U. opens its farm markets. In recent days, though, trade officials say Brazil has been more open to discussions.

Brazil's trade representative was highly critical of the E.U. stance when he left Tuesday night's talks. He questioned the sincerity of the Brussels offer and said nearly everyone who spoke during the negotiations was against the E.U.'s latest offer.

-By Juliane von Reppert-Bismarck, Dow Jones Newswires; 322-740-1487; juliane.vonreppert@dowjones.com

(END) Dow Jones Newswires

11-08-05 1830ET Copyright (c) 2005 Dow Jones & Company, Inc. Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.  Top of page

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