Doha trade talks may resume in April

The World Economic Forum (WEF) conference last weekend in Davos, Switzerland, set the scene for the possible regeneration of the Doha round of World Trade Organisation (WTO) talks. The Doha round collapsed last year after five years of discussion on greater freedom of trade in argiculture, manfacturing and services. The latest developments have raised the possibility of the outline of a deal ready by April - a considerable achievement considering the number of countries, vested interests and emotive issues involved.

The major issues leading to last year's collapse of the trade talks were the EU's Common Agricultural Policy, the US government's agricultural subsidies, and demands from the united front of the G20, a bloc of developing countries led by Brazil, India, China and South Africa.

In the previous climate, parties blamed each other for lack of progress with agriculture proving to be the main point of contention. Developing countries demanded protection for farmers from cheap imports by subsidised farmers in the industrialised nations. Equally, EU and US farmers fought to keep their subsidies. According to EU Trade Commissioner, Peter Mandelson, there is a new consensus whereby the larger developing countries like India and China would accept greater openness of their economies to industrial goods. In return the industrialised nations would cut farm protection.

The 'new mood' would see the focus go from agriculture to a broader view in which all facets of trade would be up for negotiation. Rachid Mohamed Rachid, the Egyptian minister who co-ordinates African countries at the WTO, said that the phase of treating agriculture as more important than other talks was over.

The latest diplomatic developements are being led by the US and the EU. A compromise being mooted at present is a cap of $17bn on American farm subsidies, and a 54% reduction in EU tariffs representing a plausible compromise on both sides. That said, both also want to preserve protection on sensitive goods. The Americans in particular will now want to move away from the abstractions of the past negotiations, to get a detailed understanding of exactly how much of particular product they will be able to trade after the deal.

Some commentators have attributed the instigation of the renewed hope for Doha to business leaders. Notably, at Davos a group of 7 European business organisations made a joint call on ministers to 'save Doha now'. These leaders realise that the WTO is the forum where they can gain greater access to expanding markets. The stalling of the Doha round meant that the developing countries, which now make up two thirds of the organisation, would not agree to further freedom for trade without progress on agriculture. The politicans will be forced to roll up their sleeves and bring some results home from Geneva, home of the WTO.