<http://www.guardian.co.uk/business/story/0,3604,1476751,00.html>
EU offer may unlock stalled trade round Mandelson makes concession on agricultural tariffs Ashley Seager in Paris Thursday May 5, 2005 Guardian Hopes of a global trade deal received a major boost last night after Peter Mandelson offered changes to Europe's controversial farm protection system to break a deadlock in the liberalisation talks. Europe's trade commissioner offered a compromise package at a make-or-break meeting of trade ministers in Paris aimed at bridging the gulf between rich and poor countries. With time running out before the July deadline for progress set by Supachai Panitchpakdi, director general of the World Trade Organisation, Mr Mandelson's offer of a deal over how to define agricultural tariffs was welcomed by key agricultural-exporting countries such as Brazil, Australia and India, as well as the US. The agreement still needs to be ratified by the 24 trade ministers in attendance. The agricultural issue is central as it will enable all countries to compare accurately the size of their respective tariffs so they can agree during the Doha round of talks how much to cut them by. Details of Mr Mandelson's offer were sketchy but it is likely to mean deeper cuts in EU import duties than it had wanted. The 148 members of the WTO have pledged to agree a deal on agricultural subsidies and tariff reduction by the time of the summit in Hong Kong in December and hope to have a broad outline by July. They want to wrap up the whole Doha round, which also includes manufacturing and services trade issues, by the end of 2006. The aim is to improve the lot of developing countries, which face huge barriers to selling goods to rich countries. Mr Mandelson, Britain's former trade secretary, said: "I refuse to be pessimistic ... The price of failure would be colossal. "There has been too much brinkmanship. We've been doing too little, too slowly, and we've got to speed up," he said. The newly sworn-in US trade envoy, Robert Portman, said all trade blocs needed to redouble efforts to meet the "extremely important" Doha goals of reducing poverty. A deal on agricultural tariffs was the "engine" that would drive the talks forward, he said. "The engine needs a jump-start ... I think we have made real progress on bridging some of the gaps," he added, referring to the subsidy-defin ition problem known as ad-valorem equivalence (AVE). Oxfam, which has been very critical of what it terms EU foot-dragging, was pleased. Amy Barry, a spokeswoman, said: "Any consensus that has been reached on the vexed AVE issue would be very welcome because until they solve this problem we cannot move forward on anything else. "There is a lot of work to do between now and December if we are to get a successful outcome to the Doha negotiations, which would contribute to poverty reduction." Mr Portman said: "It's a significant breakthrough ... without that, the round would have continued to have been stalled." He said the US had acted as an honest broker. "The EU has come forward with a constructive proposal. It is difficult to imagine moving forward without a formal methodology on ad-valorem tariffs," he said. The World Bank calculates that a successful Doha round would raise world incomes from higher trade flows by $500bn (�263bn). The round was due to be wrapped up last year but repeated wrangling has pushed that deadline back. -- "We are what we compute" [Duncan Foley]
