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Top trade ministers see 'sound basis' for WTO push
2009-01-31
DAVOS, Switzerland (AFP) - Leading trade ministers on Saturday said there was a "sound basis" for agreeing a new global free trade pact this year amid growing fears about protectionism as the economic crisis bites. Ministers from 18 economies met on the sidelines of the Davos forum, saying afterwards that they would push to overcome their differences early this year in the so-called Doha Round of World Trade Organization (WTO) negotiations. "We recognise the major progress made in 2008 towards finalising modalities in the Doha Development Round, which provides a sound basis for an early resolution of the remaining differences in 2009," a declaration endorsed by the ministers said. In the declaration called "open trade for economic recovery", they also pledged to refrain from raising trade barriers or imposing new export restrictions. There was no permanent US negotiator at the meeting, however, which brought together key emerging powers Brazil and India as well as European and Asian ministers. Acting US Trade Representative Peter Allgeier endorsed the statement. Ministers have been struggling to agree a trade deal since talks were launched in Doha in 2001 and regular commitments to make progress and complete the round have come to nothing. World leaders had pledged in a meeting in Washington in November to agree a framework agreement before the end of 2008, but World Trade Organization chief Pascal Lamy called off a mooted December gathering due to a lack of consensus. Lamy warned that trade was "already a casualty" of the global slowdown, with sharp falls in trade flows that are in turn leading to further unemployment. In addition, countries are having to fight rising protectionist sentiments. "Ministers are worried because they are under domestic political pressure and what they hear at home is that trade should go to the toilet with the rest of the Washington Consensus, which is a matter of worry for them and for me," he said. "Throwing trade out with the bath water is a big mistake -- not that the Washington Consensus did not have its excesses as we've seen. But not in trade, and trade opening is none of the causes of the crisis," he stressed. Trade liberalisation is a main pillar of the so-called "Washington Consensus" which was coined in the late 1980s to sum up a set of principles adopted by the International Monetary Fund to fight crises in Latin America. Other core ideas include privatisation, deregulation and tight control over government spending. A Doha deal could fight protectionist pressures, have a multiplier effect on any economic recovery and offer confidence to the private sector, Lamy said. "Ministers who were here see concluding the round as an urgent and integral part of the stimulus packages which are being crafted," he said. Swiss Economy Minister Doris Leuthard, host of the meeting, set out a possible timetable for talks, saying ministers could meet before a G20 summit in April, then again in June, before a full meeting in Geneva in July. "All of us have expressed a strong commitment to finalise the Doha negotiations but this is not enough. We need a commitment on the starting point," she told reporters. "One important element will be in the next weeks and months if every member says yes (to restarting process), that we do not begin with backtracking. The starting point of our discussion is what we discussed in July, up to December." WTO members were seen as coming close to agreeing a deal in July in Geneva, but talks fell apart after more than a week of intense negotiating amid mutual recriminations from rich and poor countries. Fear of protectionism has stalked this year's Davos meeting, with leaders and business officials stressing the danger that the next phase of the economic crisis could be government policies that crimp trade. Korean Trade Minister Kim Jong-Hoon said: "There were fears about protectionism which is on the rise. Trade is not part of the problem, it is a stimulus." The worry is that anger at job cuts resulting from the financial crisis and the use of public money in bailouts could lead governments to enact policies to favour their national companies and close their markets to foreign products.
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