The EU, US and Brazilian trade chiefs are meeting in Rio de Janeiro this weekend in a bid to bridge yawning differences on how to tear down global trade barriers before an April deadline.
Breaking down trade barriers is the WTO's long-term aim
The major players at the World Trade Organization are not making any grandiose claims for what the weekend meeting can achieve, with the European Union still reluctant to meet a chorus of demands to relax its farm trade. But all sides know that something has to give if the WTO is to reach its goal of establishing the broad outlines of a global trade deal by the target date of April 30.
WTO Director General Pascal Lamy
WTO chief Pascal Lamy is to join the talks hosted by Brazilian Foreign Minister Celso Amorim along with European Union Trade Commissioner Peter Mandelson and US Trade Representative Rob Portman.
"Devastating" for developing countries
On the eve of the Rio meeting, Brazil, India and South Africa turned up the heat on Europe by lashing out at new EU rules on chemicals that they complained would be "devastating" for developing nations' exports. The EU plan for the registration, evaluation and authorization of chemicals (REACH) is expected to come into force next year, after it was adopted by the bloc's member states in December.
South African Foreign Minister Nkosazana Dlamini-Zuma said the directive would require poorer countries to register about 30,000 chemicals at a cost of more than $10 billion (8.2 billion euros) to keep their raw materials flowing to Europe.
"If REACH were to be implemented in its current form, it would wreak havoc and stunt the development of our economies," she said this week. "The impact on minerals, ores, chemicals, textiles and metals would be enormous and devastating."
In a joint communique, Dlamini-Zuma and her Brazilian and Indian counterparts urged the EU to reconsider the "grave consequences" of REACH.
More free trade blocs
The three major developing economies welcomed preliminary discussions on a prospective free trade bloc between South America, southern Africa and India. The United States has already clinched a series of such regional trade arrangements, while denying it is any less committed to an overarching deal at the WTO meeting.
The WTO members are struggling to reach an agreement by April 30 on slashing tariffs on farm and manufactured goods, an essential part of wrapping up the "Doha Round" of talks that started in 2001.
Brazil, India and South Africa have joined forces
Developing countries led by big emerging markets such as Brazil and India insist the rich world, notably the European Union, must move first by dismantling generous agricultural subsidies. The European Union, backed to an extent by the United States, retorts that developing nations must in return grant much greater access to its industrial exports and service industries.
The overall aim is to achieve a comprehensive agreement on lowering barriers by the end of this year. The deadline coincides with US President George W. Bush losing his authority to sign off on trade deals without Congressional approval.
US Trade Representative Portman said he is hopeful that the parties in Rio can build on their talks from London and move closer to establishing a framework in advance of the upcoming (April) deadline," the US trade chief's spokeswoman told the AFP news agency.
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But European Union Trade Commissioner Peter Mandelson has ruled out further concessions from the European Union at this weekend's meeting, riling those who insist that European farm support is the biggest distortion to international trade.
"Brazil has clearly indicated that it will not concede on the agricultural question and that it will offer nothing in exchange unless there is a counter-offer on market access," a Brazilian trade source said.
But the official added that the willingness of Lamy, Mandelson and Portman to travel so far at short notice "shows the good willingness of everyone to respect the (April) deadline."