Developing Nations Trying to Break WTO Impasse: Minister

(Video: Wharton School • Story: Agence France-Presse)

Developing nations are working on a compromise which they hope can help break a deadlock in global trade talks, Indonesian Trade Minister Mari Pangestu said Wednesday.

The Group of 33 (G33) developing states’ secretariat was working to convene a meeting of officials to draw up a compromise, Pangestu said on the sidelines of an Association of Southeast Asian Nations (ASEAN) meeting in Singapore.

“We’re working hard to come up with a compromise which we think is doable,” she told reporters. Indonesia is coordinator of the G33. “The secretariat of G33 is working hard right now as we speak. There will be, probably beginning next week, the beginning of informal discussions between senior officials to find the technical compromise.”

The Doha Round of global trade negotiations broke down in Geneva last month after India and the U.S. failed to agree on a safeguard mechanism allowing for special tariffs on agricultural goods if imports surge or prices fall.

Washington rejected Indian proposals that developing nations should be allowed to boost duties by an additional 25% on farm products if imports surged by 15%. Washington insisted extra duties should be allowed only if imports rose by 40%.

Pangestu said a compromise was needed on the issue, adding the mechanism must be effective and easy to use, as requested by developing countries, but also “that this is not being abused, that there’s discipline to using it.” She said the technical discussions hope to make progress by September in order to get the World Trade Organisation ministers back to a meeting.

Indonesian President Susilo Bambang Yudhoyono has called on the leaders of fellow developing countries Brazil, China and India to help revive the stalled negotiations.

Pangestu said Yudhoyono and the other leaders were trying to “ensure that the political commitment and will to resume negotiations comes from the highest level.

The trade minister said the danger of countries backsliding towards protectionism was real. “When you have an economic slowdown as is being predicted in the US as well as Europe and Japan, then this is often the time when you have unilateral protectionism. We certainly would be very concerned about that,” she said. “The answer to that is to ensure that the multilateral trading system is preserved and that means again prioritising at the highest level of political commitment to resume negotiations as soon as possible.”

Singapore Prime Minister Lee Hsien Loong warned against reverting to protectionism when he opened the five-day ASEAN economic ministers meeting on Tuesday. He said a strong rules-based global trading regime remained the best option for the world economy.