EU, Brazil insist Doha round trade talks can be rescued

(LISBON) - The Doha round of global trade talks can be salvaged despite rows over farm subsidies, trade tariffs and market access, European Commission chief Jose Manuel Durao Barroso insisted Thursday after an EU summit with Brazil.

But in Australia US Trade Representative Susan Schwab warned that without a breakthrough this year, the Doha trade liberalisation round could remain deadlocked for several years.

Brazil and fellow developing giant India walked out of talks last month with the European Union and the United States, throwing into doubt whether a deal acceptable to all 150 World Trade Organisation members could be reached.

"Positions are not as far apart as is sometimes made out. It is possible to save Doha. The EU wants to save Doha," Barroso said after conferring with Brazilian President Luiz Inacio Lula da Silva at an inaugural European Union-Brazil summit in Lisbon.

The Doha talks, launched in the Qatari capital in November 2001 and aimed at tearing down global trade barriers, have foundered in disagreements that have revealed deep divisions between developed and developing countries.

Barroso, in remarks late Wednesday, did not say just how differences of opinion on subsidies could be ironed out, but Portuguese Prime Minister Jose Socrates, whose country currently holds the rotating EU presidency, also stressed that "Doha is not dead."

EU Trade Commissioner Peter Mandelson, who attended the Lisbon talks as well, earlier insisted that any suggestions Doha was "dead" after six years of wrangling were "manifestly exaggerated."

But at a meeting of trade ministers from 21 Asian-Pacific nations in Cairns, Australia, Schwab said Thursday: "I think there is a sense that if we don't get it done this year, Doha could well go into hibernation for several years to come."

Lula, trying to to persuade Europe to cut agricultural subsidies and lower trade tariffs, said that if the Doha talks ultimately collapsed it would "endanger the multilateral trade system (and) greatly damage the world's poorest countries."

The Brazilian leader offered to seek a "flexible" outcome while Socrates called for "greater balance between liberalisation and development."

"We have to sit down, smooth out the differences and negotiate," Lula urged his European colleagues, saying that rather than seek a "dream agreement" participants needed a settlement which would allow "the poorest countries to obtain a little benefit."

But Lula stressed there had to be "an effective and substantial reduction in all forms of subsidy and (trade) barriers which twist the rules of agricultural trade."

Socrates agreed that developed states had to agree to reductions in government aid to agriculture, a view liable to put the Portuguese leader on a collision course with France, the main recipient of EU farm subsidies.

The Portuguese premier also pointed to an "excess of state agricultural aid in the United States and certain European countries."