Administration says Hong Kong meeting will fail to achieve trade breakthrough | VailDaily.com
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Administration says Hong Kong meeting will fail to achieve trade breakthrough

WASHINGTON – President Bush’s top trade negotiator said Wednesday that a meeting next month of 148 countries will not be able to achieve a hoped-for breakthrough.U.S. Trade Representative Rob Portman’s comments came after three days of talks in London and Geneva. The discussions failed to clear away roadblocks so negotiators could agree in December on the outlines of a deal to lower tariffs and other barriers for manufactured goods, services such as banking and insurance, and farm products.The meeting Dec. 13-18 in Hong Kong is taking place under the auspices of the World Trade Organization.”I am sorry to report that we’ve not made the progress that we had hoped to make in order to put together a program for the Hong Kong meeting that would enable us to set forth a framework,” Portman told reporters on a conference call.Various trade ministers said the 25-nation European Union was the major stumbling block because of its refusal to go further in reducing barriers that protect European farmers.Portman hoped for some progress in Hong Kong in narrowing the differences and that the overall goal still was to wrap up the talks by the end of 2006.”It would be a grave mistake to declare this round at an end,” said Agriculture Secretary Mike Johanns, who participated in the conference call. “There is still an entire year ahead of us.”Private economists said the failure of this week’s talks was a troubling prelude to the Hong Kong meetings.”The short-term and midterm prospects look pretty dim for a breakthrough,” said Dan Griswold, director of the Center for Trade Policy Studies at the Cato Institute, a Washington think tank.Referring to two earlier trade sessions, he said, “The best we can hope for is to avoid a Seattle-Cancun style of meltdown, which would be devastating.”A meeting of trade ministers in Seattle in December 1999 failed to launch new trade talks and was marred by rioting by anti-globalization protesters.Talks did finally get under way in Doha, Qatar, in December 2001, but a meeting in Cancun, Mexico, in 2003 failed to make progress in narrowing differences.Developing nations are demanding sharp cuts in the subsidies and tariffs that protect farmers in rich countries. Wealthy nations want developing countries to do more to open their borders to manufactured goods and competition from rich nations’ banks and other service companies.Over the weekend, President Bush was unable to get the leaders of 34 nations in the Western Hemisphere to agree to restart talks aimed at creating the world’s largest free trade area, stretching from Alaska to Argentina.Some analysts said Bush’s sinking approval ratings and the growing protectionist pressures in Congress were partly to blame for the negotiating failures. In addition, they said that many foreign leaders, especially in Europe, were facing a backlash against trade liberalization.The U.S. has lost 3 million manufacturing jobs since mid-2000 and seen trade deficits swell to record highs. Commerce Secretary Carlos Gutierrez, in a speech Wednesday, said policy-makers should not heed the cries for protectionist barriers.A bill in Congress would impose 27.5 percent across-the-board tariffs on Chinese products unless Beijing went further to overhaul its currency system.”New trade barriers would do great damage to both the U.S. and the global economy,” Gutierrez told the Chicago Council on Foreign Relations. “We must reject the economic isolationists and their medieval medicine.”Gary Hufbauer, a trade expert at the Institute for International Economics, a Washington think tank, said prospects were fading for success of the Doha round of trade talks even a year from now.Vail, Colorado


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