WTO kickstarts trade talks

By Andrew Walker BBC economics correspondent in Geneva

The WTO failed to agree the agenda of a new trade round at Cancun

A month after the failure of the Cancun trade summit the World Trade Organisation's member countries are back to the negotiating table.

At a meeting at WTO headquarters in Geneva, ambassadors from the member countries agreed to get back to work on the wide ranging trade liberalisation talks - or 'trade round' - launched two years ago.

But the truth is that it is not a return to business as before Cancun.

In a BBC interview after the meeting, WTO Director General Supachai Panitchpakdi was clearly heartened by the resumption of work. But he said it was too soon to talk about the negotiations being truly back on track.

Cautious start

The truth is that it is a very tentative move that the WTO is making - proof, if it were needed of how serious the divisions of Cancun and after have been.

All formal negotiating sessions, which any member country can attend, are cancelled.

Instead, two top officials have the go-ahead to conduct consultations. Dr Supachai and the Chairman of the WTO's top committee (Carlo Perez del Castillo, the Uruguayan Ambassador to the Organisation) will have meetings with delegates from small groups of countries or even what are called confessional sessions with just one country.

And the agenda is narrower than before. The renewed discussions will focus on just four areas, all of them important and controversial. But it does look like a case of trying to bite off something that will be more digestible than the whole of the WTO's negotiating menu.

Deep divisions

One of the four issues is agriculture, the usual suspect when things go wrong in world trade talks.

Supachai will need all his powers of diplomacy

For years the pressure has been on the European Union, the US, and Japan, to make deep cuts in subsidies and tariffs that protect their farmers from competition.

Most developing countries want that and so do a few rich ones (Australia, Canada and New Zealand).

The US Trade Representative Robert Zoellick said in Cancun that he wanted an "ambitious" agricultural agreement.

The US would go far, provided others, including some developing nations would too.

But Europe would not go far enough for the developing world; nor would Japan, where the biggest complaint from the rest of the world is the astronomical tariffs on imported rice.

Another of the four issues is one specific agricultural problem - cotton.

Scratchy textiles problem

A group of African countries want subsidies to cotton farmers abolished, especially in the US but also in China and the EU (there is some cotton production mainly in Greece and Spain).

The African countries say they could be very competitive in a fair market, and increased cotton production could, they say, make a real contribution to tackling poverty.

This is very uncomfortable for the US. There is a presidential election next year and most of the cotton production is in Southern states, where President Bush and the Republican Party are strong.

And cotton was not previously on the agenda of the talks as an item in itself.

In due course Dr Supachai and Mr Perez del Castillo will also have to tackle tariffs on trade in industrial goods and a set of new issues that were the immediate cause of the breakdown in Cancun.

Impossible task?

The advocates of new negotiations - on foreign investment, competition, transparency in government purchasing and simpler trade procedures - were a group of developed nations led by the EU. The poor nations were not having it and so we had the impasse in Cancun.

Can they do it all - and the other elements in the negotiations - by the deadline of the end of next year?

Almost certainly not, although neither Dr Supachai nor Mr Perez del Castillo is saying so. Dr Supachai could not say for sure when he spoke to the BBC that all the members want the Round to get back on track, though he said those he has spoken to do want it to.

The situation is complicated by some elections to contend with over the next year or so, notably in the US and India.

The big players will have to make concessions to secure a final deal. Elections make it harder to offer concessions that are resented by affected interest groups at home.

Bu Dr Supachai said the member countries now more willing to negotiate than they were before Cancun.

They will need to be if the WTO's business is to get done.