WORLD TRADE NEWS SUMMARY

WTO Nations Push Hard for Resumption of Doha Round of Talks

The World Trade Organization (WTO) is currently working hard to revive the Doha Development Round of Trade Talks. In fact, WTO chief Pascal Lamy met with Indian Prime Minister Manmohan Singh last Friday in order to talk about the stalled global trade negotiations. Mr. Lamy discussed with Mr. Singh the current efforts to salvage the WTO talks. Moreover, the WTO chief said that he wanted key negotiators, such as Brazil and India, to push harder in order to successfully complete the Doha talks. Both Brazil and India represent the interests of the developing countries in the global trade negotiations, while the United States and the European Union serve as the key negotiators for wealthier nations.

US Trade Representative Susan Schwab stated that a deal, which could push for the progress of the global trade talks, was still far despite the urgent move of both the US and the EU to save the Doha Development Round of Trade Talks. According to her, the key players of the global trade talks have not yet reached a convergence. Meanwhile, EU Trade Chief Peter Mandelson stated that the key players have already made a significant progress in terms of agriculture. According to him, the gap among the key players was narrowing. While Mr. Mandelson has been urging his fellow negotiators to do more in restarting the WTO talks, Ms. Schwab said that they were still far from reaching an agreement that was key to the resumption of the Doha Development Round of Trade Talks.

Indian Commerce Minister Kamal Nath said that developing nations could compromise in order to save the global trade talks. However, he said that both the US and the EU should also improve their offers in order to  break the deadlock in the trade negotiations. According to Mr. Nath, the US needed to radically reduce the amount of its farm subsidies in order to prevent imbalances and distortions in global trade. Mr. Nath made these comments ahead of the mini-ministerial meeting that would be held in Davos, Switzerland later this week. Mr. Nath belongs to the "Group of Four," which comprises the key negotiators of the Doha talks

Meanwhile, German Chancellor Angela Merkel said that leaders from the western countries must convince people of the advantages of globalization. But at the same time, she warned countries of the disadvantages of globalization. As such, she called for leaders to create a framework in order to ensure that every nation would benefit from globalization. According to her, there was still a chance for the WTO to successfully complete the trade negotiations. But this would require more flexibility on the part of the key players such as the US, the EU, and developing countries. Ms. Merkel made these comments at the World Economic Forum, which had just started in Davos, Switzerland. Trade ministers from more than 30 countries would also be gathering on the sidelines of the WEF in order to talk about the resumption of the global trade talks. The mini-ministerial meeting would be the most recent attempt of the trade ministers to revive the Doha Development Round of Trade Talks.

Mr. Lamy said that the trade ministers, who would be meeting in Davos, could decide to revive the Doha Development Round of Trade Talks. According to him, the trade ministers attending the event were not expected to engage into serious negotiations. But he said that they might be able to increase the momentum of the global trade talks "depending on their will." Mr. Lamy said that the new year made a good start for the WTO negotiations since nations realized that the failure of the Doha talks would gravely affect many members of the economic bloc. Mr. Mandelson has maintained an optimistic view regarding the trade talks. According to him, farm issues could be settled despite the influence of agricultural lobby in richer countries. Both Mr. Lamy and Mr. Mandelson also agreed that the US Congress should extend the special trade negotiating authority of President George W. Bush. The trade negotiating power is due to expire on June 30.

US in Trade Talks with South Korea and Malaysia

The on-going trade talks between the US and its two major partners in Asia are currently at risk of failing. While Malaysia wants to maintain Malay-friendly procurement schemes, South Korea is against the removal of duties on rice imports. It must be noted that signing trade pacts is important to the US' relations with Asian countries. South Korea is currently the seventh-biggest international trade partner of the US. If the on-going FTA (free trade agreement) talks between the two nations materialized, it would be the largest trade pact to be signed by the US since the North American Free Trade Agreement (NAFTA) in 1993. But both the US and South Korea need to settle several key issues in order to push for the progress of their trade talks. Many South Koreans, especially farmers are against the FTA, which they believe will affect their country's farm industry.

Meanwhile, Assistant US Trade Representative Wendy Cutler said that the FTA talks between her country and South Korea were progressing. According to her, the Bush administration could have an international trade deal ready for congressional approval before the special trade negotiating authority of President George W. Bush ends in June. Ms. Cutler just came from Seoul where she had attended the sixth round of FTA talks with South Korea. She said that the seventh round of FTA discussions would be held in Washington. The deputy US trade representative also said that the two parties would talk about other issues, such as the resumption of beef exports to South Korea. Both sides are trying to resolve the issue, which is a key factor behind the progress of their FTA talks.

While consumers, who are used to enjoying the perks of the dollar's strength, are saddened with the decline of the currency, it seems that the government is not bothered about it. In fact, it is even happy with the situation since the depreciation enables locally-produced goods to get a fair exposure in world trade, thus boosting US exports. Many US firms were already given the chance to participate in global trade because they are able to give out competitive prices, which are attractive to consumers.

Several Countries Engage in Separate Trade Negotiations

Russia and Japan held a high-level negotiation last Tuesday in an effort to boost their international trade ties, particularly in the energy sector. Aside from energy matters, the two nations were expected to talk about a territorial issue where in four islands controlled by Russia are claimed by the Japanese government. The negotiations were aimed at improving the weak relations between Russia and Japan. A Japanese official described his country's ties with Russia as "conspicuously weak" compared to the other members of the G-8 a group of the world's most developed nations. Meanwhile, many Japanese companies are interested to share their technology to Russia in return for trade agreements on natural gas and petroleum. Energy cooperation between the two nations started to deteriorate in 2006 when both Mitsubishi and Mitsui were forced to divide their share in the Sakhalin-2 LNG (liquefied natural gas) project.

The Federation of Indian Chambers of Commerce and Industry (FICCI) suggested a strategy that could help in boosting the international trade relations between India and Russia. At present, India is planning to improve its economic ties with Russia up to $5 billion in the next five years. The scheme covers the establishment of an institutional mechanism that would resolve financial issues faced by various exporters. The strategy also includes the use of money from the rupee-rouble debt agreement in order to finance investments in the country. According to the FICCI, the recommendation would significantly help India to achieve its target of doubling its trade with Russia.

An Iranian official recently said that his country, Pakistan, and India hoped to reach an international trade agreement regarding a proposed gas pipeline project. Hojatollah Ghanimifard, the key negotiator of Iran in the Iran-Pakistan-India (IPI) gas project, said that the three nations are working hard in order to come up with a final formula, which would dictate the price of the gas project. Representatives from the oil ministries of the three nations met last Tuesday for a two-day meeting in order to talk about the proposed deal. Particularly, the three representatives discussed the price of the gas project. Mr. Ghanimifard, who also serves as the director for international affairs at the NIOC (National Iranian Oil Company), said that his country was ready to assume a crucial responsibility in providing the energy needs of neighboring countries.

Mercosur has been urged by leaders in the region to improve its efforts in addressing social issues. Brazilian President Luiz Inacio Lula da Silva stated that aside from national interests, the international trade bloc should also focus on other issues such as inequalities among the members. Meanwhile, Venezuelan President Hugo Chavez said that the trade group should be "de-contaminated of neo-liberalism." Mr. Lula said that Argentina and Brazil, which are the two biggest nations in the bloc, should lead the efforts in resolving inequalities between the rich and the poor in the region. According to Mr. Lula, the move posed as a huge challenge since it would require Mercosur leaders to "relinquish" both personal and national interests for the sake of the poor. He added that progress would be impossible for Latin America without integration.

US Lawmakers Call for Easing of Cuba Embargo

Some US legislators said last Tuesday that they would propose a bill in order to ease the international trade embargo imposed on Cuba more than four decades ago. A group of US legislators visited Cuba last month in order to discuss about the existing embargo. According to Representatives Jo Ann Emerson (R-Mo) and James McGovern (D-Ma), the House Cuba working committee that was represented by both parties found the need to loosen the trade embargo imposed on the country. It must be noted that the United Nations has been passing a non-binding resolution against the embargo each year since 1991. In fact, the organization voted 183-4 in favor of lifting the embargo on November 8, 2006. But the US government has not lifted the embargo until now.

Russian Petroleum Exporters to Gain More Independence

Russian President Vladimir Putin announced that his country would lessen its dependence on transit countries in supplying Europe with oil. The move was aimed at addressing criticisms against Russian exporters after they decided to disrupt oil supplies passing through the Belarus pipelines. At present, Russia and the EU are negotiating regarding the security of energy supplies to Europe. It must be noted that German Chancellor Angela Merkel was among those who strongly criticized Russia's unannounced move to cuts its oil supplies.

Asia Aides Africa in Trade

According to a recent report issued by the World Bank, Asian countries like China and India have contributed much to the economic development of Africa through improved international trade. It must be noted that Africa's imports from the US and Europe decline sharply while its major exports to Asia grew by up to 27%. Asia is helping Africa to boost its status in world trade by offering a wide range of opportunities. However, some African trade analysts still see a huge imbalance in the trade ties between Asia and Africa.

Four Countries File Complaint against US at the WTO

Several countries, including the EU, Brazil, Argentina, and Australia are joining Canada in its battle against the US' subsidies to corn growers. The US, which is one of the biggest corn exporters worldwide, has been accused of providing assistance beyond what was stipulated in the WTO rules. The main area of dispute is the $9 billion worth of farm subsidies given by the US to corn exporters for two consecutive years. The assistance has been claimed by Canada and some countries in Europe to be affecting their local products.

Nuclear Phase Out to Increase Germany's Dependence on Russian Oil

Germany faces the risk of becoming more dependent on Russian oil if it would give its go signal to the proposed nuclear phase-out deal. At present, Germany gets some of its energy supplies from Russia, but it may need to buy moer supplies in the future if it chooses not to resort to nuclear power. Energy analyst Mark Lewis said that shutting down nuclear plants was quite unthinkable since it would deprive Germany from many benefits that the country is enjoying at present.


TOBOC TEAM