Geneva hosts crisis trade talks

Negotiations have been dominated by a row over agricultural subsidies. swissinfo/L. Schäublin

The Swiss city of Geneva plays host to last-ditch talks on Tuesday aimed at rescuing a global trade accord from collapse.

Ministers from more than 20 countries, including Switzerland, are hoping to break a negotiating deadlock before a crucial summit in Hong Kong in December.

The latest round of talks comes a day after ministers from five key World Trade Organization (WTO) member states sought to dampen expectations that a deal was imminent.

Monday’s meeting in London between India, the United States, the European Union, Brazil and Japan is reported to have ended with “wide disagreements”.

A spokesman for Swiss Economics Minister Joseph Deiss, who is representing Switzerland at the meeting in Geneva, indicated that Tuesday’s talks were likely to drag on “late into the night”.

WTO chief Pascal Lamy also played down any expectation of a breakthrough, telling Britain’s Guardian newspaper that there was a “risk of failure” and “no plan B”.

Pressure grows

Switzerland, along with countries such as the US, Japan and the EU, is under mounting pressure from developing countries to reduce farm subsidies and cut import tariffs on agricultural products.

Hopes of a breakthrough rose last month after Washington offered to cut domestic farm subsidies.

But with just over a month to go before the Hong Kong meeting – billed as the end of the so-called Doha trade round launched in 2001 – disagreements remain.

Switzerland’s chief negotiator at the Geneva-based WTO, Luzius Wasescha, is under pressure at home not to abandon the country’s farmers by agreeing to sweeping agricultural reform.

Two weeks ago he threatened to walk away from the negotiating table, citing the intransigence of exporting countries.

“We don’t want to be negative,” he said, “but if things happen which are so far away from the simplest reality then we will have to say no.”

Brinkmanship

But Swiss economics commentator Beat Kappeler told swissinfo there was “no chance” of Switzerland throwing in the towel at this stage.

“This is just a matter of internal politics which for the moment imposes itself on the Swiss position at the WTO… but they cannot afford to veto the talks.

“Frankly Switzerland’s position is not very credible, especially since in the past it has been one of the most supportive nations of free trade.”

According to Kappeler, Switzerland’s defence of agriculture – which he points out accounts for only 0.5 per cent of the country’s gross domestic product – has “damaged its free-trade credentials” within the WTO.

“This stance is also damaging when you consider Switzerland’s interest in having free trade in services, which is the ultimate goal of this round of trade talks.

“Instead of pushing for this, Switzerland has gone back to the Neolithic era in trying to defend an old-fashioned agricultural system.”

Kappeler estimates that 75 per cent of employees in Switzerland work in the services sector and he argues that the Swiss government should be spending more of its time at the negotiating table defending their interests.

“A breakthrough here would really serve Switzerland’s interests… so my advice [to the Swiss negotiators] would be ‘accept defeat [on the agricultural dossier] with much delight’, so you can come home and change the country’s agricultural policy once and for all.”

swissinfo with agencies

Key facts

Launched in November 2001, the Doha round of trade negotiations has been prolonged amid wrangling over agricultural subsidies.
The next key stage will be the ministerial conference in Hong Kong in December.