EU Commissioner Sees ‘Makings of an International Trade Agreement’

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European Union Trade Commissioner Peter Mandelson said on Monday he saw the makings of an international trade agreement in new proposals drafted by the World Trade Organization.

The WTO is expected to issue negotiating texts early this week in readiness for talks by senior officials and then a meeting by trade ministers within a month or so.

Mandelson told Reuters in an interview: “They contain significant new elements reflecting the substantial progress that we have made in negotiations over the recent period.

“I think that what we have on the table already is an outline deal which is worth at least two to three times in value to the global economy what was provided by the previous Uruguay round. I think the key trade-offs are there for us to make.”

The trade talks are part of the Doha round, which is now in its seventh year and overdue for completion. The main obstacle has been finding a compromise between developing countries that want to export food and developed countries that want to protect their farmers and export services and manufactured goods to developing countries.

“I do understand the political difficulties and problems that we will still face,” said Mandelson, speaking on the sidelines of a World Economic Forum meeting in Egypt.

These include the chronic dispute over U.S. domestic subsidies to farmers, which make food from other countries less competitive, and the extent to which emerging-economy countries such as China, Brazil and India are prepared to reduce their tariffs on industrial goods, he added.

Mandelson said the Doha round of trade talks was an essential part of solving the food supply problems that have come to light in sharp recent rises in grain prices.

“If we want to tackle the underlying causes of the food crisis, then we have to bring about a fundamental reform of agricultural trade in the world. The vehicle for doing that is the Doha talks,” he said. “If we fail in those talks then we will have missed a major opportunity to bring about that fundamental reform.”

Answering demands for a ban on the production of fuels from agricultural products, Mandelson said that biofuels had their place in reducing the carbon emissions, which arise from burning traditional fossil fuels.

But the production process should be sustainable and should not displace food production, he added. “There are countries which have such vast land masses that they could use that land for biofuel production without making any difference at all to food production,” he said.

“We have to approach this with considerable prudence and considerable caution but it is possible to get biofuel production right,” he added.

Egyptian President Hosni Mubarak called for a ban on biofuel production at the opening session of the meeting on Sunday in the Red Sea resort of Sharm el-Sheikh.
(editing by Christopher Johnson)