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WTO Developing Nations Split On Industrial Trade

Proposal by World Trade Organization Latin American and Asian members calls for greater concessions by both rich and poor countries to reach a new global trade pact.

GENEVA (AP) - A group of Latin American and Asian members of the World Trade Organization proposed Monday a ''middle ground'' in talks to liberalize trade in manufactured goods—a sign that developing countries are breaking ranks with Brazil and India.
 
The proposal, obtained by The Associated Press, calls for greater concessions by both rich and poor countries as part of efforts at reaching a new global trade pact and comes only days after talks among the WTO's four biggest powers collapsed in Germany over eliminating barriers to farm and manufacturing imports.
 
Signed by Chile, Colombia, Costa Rica, Hong Kong, Mexico, Peru, Singapore and Thailand, the offer would open up industrial markets in the developing world to greater foreign competition than under proposals made last week by Brazil and India.
 
Brazil and India were sharply criticized by the United States and the European Union for refusing to offer new market opportunities for manufacturing exports. The two emerging powers in turn blamed the impasse on U.S. reluctance to make cuts in the billions of dollars it pays annually in farm subsidies.
 
''The losses and missed gains associated with a failure or freezing of the (Doha round) far outweigh the costs of a less than perfect agreement,'' said the proposal Monday by the eight WTO members.
 
It warned that all WTO members need to give ground in the global trade talks, known as the Doha round for the Qatari capital where they were launched six years ago. The talks aim to add billions of dollars to the world economy and lift millions of people out of poverty through new trade flows. They have struggled largely because of wrangling between rich and poor countries over eliminating barriers to farm trade and, more recently, industrial trade.
 
''The time has come for all WTO members to show the flexibility needed to conclude the negotiations by early 2008 at the latest,'' the proposal said. ''Time is running out, so we encourage other members to show their own flexibilities in the coming days.''
 
Failure over the next five weeks to agree on the framework of a deal to cut tariffs and slash subsidies could make an accord impossible for at least three years if ever, trade officials have warned. They say subsidy and tariff concessions are very unlikely in 2008, when U.S. elections will be held, and 2009, when Indian elections are scheduled.
 
Under the complicated formula used by the WTO for determining industrial tariff cuts, a lower figure corresponds to higher cuts and greater market access for exporters.
 
Officials at the meeting last week in the German city of Potsdam said Brazil and India proposed a figure of 30, more flexible than their official position of 35, which is supported by a group of developing countries that includes Argentina and Venezuela, which are both skeptical of greater industrial liberalization. Washington and Brussels are insisting on a lower coefficient from leading developing countries to ensure the creation of new trade flows.
 
The proposal Tuesday would go closer to U.S. and EU demands, calling for developing countries to accept a figure ''between the upper teens and the low twenties.'' It urged rich nations to go beyond the figure of 10 that they are demanding of themselves.
 
The eight WTO members said their offer was ''put forward assuming an overall balance across all areas of the (Doha round), especially agriculture.''
 
Compromise papers by the WTO's top agriculture and manufacturing negotiators are expected to be released in July, but many are doubtful that talks in Geneva among 150 members will turn out more successful than those that involved just the U.S., EU, Brazil and India.
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