WASHINGTON, Dec 3: Chances are dwindling for negotiators to reach a new world trade agreement by the end of 2006, increasing the possibility the Bush administration will have to seek renewal of its trade negotiating authority without a firm deal in hand, analysts said on Friday.
The probability of concluding the deal by the end of next year has become much less because of the lack of progress this fall, said Jeffrey Schott, a senior fellow with the Institute for International Economics. “Not to say it’s impossible, but it’s more unlikely and it will require a greater acceleration in the negotiations in 2006 to meet the deadline.”
The soon-to-be 150 members of the World Trade Organization are headed for a Dec. 13-18 meeting in Hong Kong with virtually no hope of achieving the breakthroughs needed in agriculture, services and manufactured goods to finish the round.
US Trade Representative Rob Portman said on Thursday he hoped countries could make enough “incremental progress” in Hong Kong to agree on a basic blueprint for a deal by mid-2006 and a final package by the end of the year.
Late 2006 or early 2007 is the effective deadline for a final package because the Bush administration needs to submit it to Congress before trade promotion authority expires in June 2007. That legislation requires lawmakers to vote on trade pacts without making any changes. Without it, Congress could approve amendments that would unravel the deal.
The White House barely won approval of trade promotion authority in 2002 after a nearly two-year battle.
Winning renewal in 2007 is expected to be equally hard and could be even more difficult if President George W. Bush’s popularity remains in a slump and congressional Republicans lose seats in the November 2006 election, Schott said.
Portman is likely to wait as long as possible before seeking a renewal of trade promotion authority because once he does, it extends the deadline for finishing the talks.
At the same time, it could hard to win approval if countries are still far apart, Schott said.
The trade talks are hung up on agriculture, with the United States, Brazil and many other countries pressing the European Union to offer deeper cuts in agricultural tariffs than Brussels has proposed so far.
For the talks to advance in 2006, major developing countries like Brazil and India will have to offer greater openings in their domestic services and manufactured goods markets to give the EU new export opportunities to offset losses in the agriculture sector, Schott said.
The United States also needs gains in those areas to sell the package to Congress, he said.
Claude Barfield, a trade scholar at the American Enterprise Institute, said he was skeptical of negotiators coming together because of the EU’s difficulty of moving on agriculture.
WTO Director General Pascal Lamy, a former top EU trade official, may have to come up with a compromise package — the way one of his predecessors did in the previous trade round — to spur countries toward agreement, Barfield said. —Reuters
