U.S. decries 'hostage-taking' in trade talks, sees hope on IT deal

Wed May 29, 2013 12:29pm EDT
 
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By Leigh Thomas

PARIS (Reuters) - A global agreement to cut red tape in world trade, which could be worth hundreds of billions of dollars to the world economy, is being stymied by some countries' "hostage-taking", a top U.S. trade official said on Wednesday.

Diplomats at the World Trade Organization have become increasingly pessimistic about striking a global trade deal at a meeting in December in the Indonesian resort of Bali, despite deliberately setting an unambitious target in hopes of reviving confidence in moribund global trade talks.

"We are not on track at this point to have Bali be successful," Deputy U.S. Trade Representative Michael Punke told Reuters on the sidelines of an OECD meeting in Paris.

Success at Bali is widely seen as the key to unlocking the stalemate that has all but killed the wide-ranging Doha round of trade talks, which collapsed in 2008 and was effectively abandoned at the end of 2011.

Punke said that put a "real premium" on the proposed Bali deal, which would make limited reforms to agricultural subsidies for developing countries and to special treatment afforded to the poorest countries under the WTO rules, as well as setting a new standard for customs procedures and red tape, known in WTO jargon as trade facilitation.

"We're worried right now specifically in the area of trade facilitation because there's been this phenomenon of hostage-taking, which means basically a handful of countries are holding up the trade facilitation negotiation and not even allowing technical work to take place," he said.

Punke said he was not going to point fingers because there was "broad recognition" about which countries were causing the problem. He has previously criticized India for proposing a "non-starter" as part of the Bali deal: a reform that would let farmers in emerging economies enjoy almost unlimited agricultural subsidies.

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A man works at a factory that manufactures laptops to be used in schools, in Viana do Castelo, northern Portugal October 24, 2010. REUTERS/Fernando Veludo-nFactos