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FRANCE: The G8 Summit: Leaders Paper Over Cracks on WTO Talks

by Robert Graham, James Blitz and Guy de JonquiresFinancial Times
June 3rd, 2003

The Group of Eightmembers yesterday committed themselves to concluding the stalled Doha world trade round on schedule by the end of next year, but hinted at no shifts in negotiating positions that could lead to progress in the talks.

The leaders pledged to provide the leadership needed to ensure the success of the World Trade Organisation's crucial ministerial meeting in Cancn, Mexico, in September and to improve market access for all WTO members, particularly poor ones.

However, a seven-point action plan set out in a joint communiqu contained no fresh initiatives and glossed over differences, particularly between the US and the European Union, on the agenda and priorities for the Doha negotiations.

The action plan also failed to mention an EU proposal, pressed by President Jacques Chirac of France, the summit host, for a temporary suspension of rich nations' subsidies on farm exports to African countries.

By concentrating on trade as a means of regenerating confidence in a world economic recovery, the G8 sought to ignore disagreements between Europe, the US and Japan over exchange rates.

In contrast to past summits, the leaders of the G8 - Britain, Canada, France, Italy, Germany, Japan, Russia and the US - avoided any reference to the current exchange rates, with the dollar depreciating against the euro to uncomfortable levels for the eurozone.

Both US President George W. Bush and Mr Chirac, in a brief press conference after a bilateral meeting, expressed confidence in global economic recovery. But only Tony Blair, prime minister, mentioned specifically the need for success in the Doha round. The G8 members, including Russia, which is not a WTO member, directed their ministers and officials to "pursue urgently" a list of broad objectives in the Doha round.

As well as improved market access, they included strengthening WTO rules, dealing with the problem of poor countries' access to medicines and seeking agreement on the parameters of negotiations on competition, investment, trade facilitation and public procurement transparency.

They also noted the importance of technical assistance to poorer WTO members and the need to improve integration of trade, finance and development policies and trade preference schemes.

The communiqu contained no reference to trade disputes between G8 members, such as Washington's WTO challenge to the EU's de facto moratorium on authorising new genetically modified crops.

The leaders committed themselves to "delivering on schedule" by the end of 2004 the goals set out in the Doha Development Agenda, and to ensuring that the Cancn meeting took "all decisions necessary to help reach that goal".

Development campaigners voiced scepticism that the US or EU would be willing to agree before Cancn to change their farm subsidy systems and questioned whether there was a real will to break the deadlock.

They also said the communiqu's wording on resolving the issue of patents and poor countries' access to medicines was too vague. Many other points in the action plan were imprecise or else restated wealthy nations' earlier pledges.

Before the meeting, business leaders had sought to impress on Mr Chirac the need for a strong message of unity following the divisions over the Iraqi crisis between Europe and the US.

Despite the outward displays of friendship at Evian, the message limited to world trade may be regarded as insufficient to generate confidence in Europe's ability to address its structural reforms and US willingness to listen to its partners.

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