Trade ministers abandoned hope yesterday for a breakthrough at a crucial meeting next month, all but conceding that long-running talks aimed at slashing global trade barriers will end without the ambitious pact that had once been envisioned.
After three days of fruitless negotiations in London and Geneva, Bush administration officials and their counterparts from other countries acknowledged that their differences remain vast over basic issues such as how much to reduce tariffs on agricultural and manufactured products. As a result, they sharply lowered expectations for a mid-December meeting in Hong Kong -- a long-scheduled conclave of all 148 World Trade Organization member countries, where major decisions are traditionally made under the glare of media attention.
That meeting's goal -- agreement on a detailed outline of a worldwide trade deal -- now stands no chance of achievement, the officials said.
"We will not make as much progress at Hong Kong as we had hoped for," Mike Johanns, the U.S. agriculture secretary, said in a conference call. Blame for the impasse belongs primarily with the European Union for taking a tough line against opening its heavily protected farm sector, he said.
"The gap is significant. This has been sobering for all the ministers," Peter Mandelson, the European trade commissioner, said in a written statement. He blamed Brazil and other developing countries.
The setback is the second for President Bush's trade agenda this month. A summit of Western Hemisphere leaders ended last week without reaching agreement on whether to revive talks on creating a Free Trade Area of the Americas, a cherished Bush initiative. Yesterday's result was even more discouraging for the administration because the hemispheric regional trade pact has been moribund for some time, whereas the global trade talks involve greater stakes, given that all WTO members would participate.
At issue is the Doha round of trade negotiations, named for the Qatari capital where they began in late 2001. Along with generating more international commerce, a principal aim of the round is to provide developing countries -- especially their farmers -- with more opportunities to gain from world trade.
The round has appeared near death before -- notably at a 2003 WTO meeting in Cancun, Mexico, that collapsed in acrimony -- only to be revived later. But yesterday's developments deepened the danger that an accord would not be wrapped up in time for it to win approval by Congress under the streamlined procedures set by trade promotion authority, which prevents lawmakers from blocking trade deals with onerous amendments. That authority expires in mid-2007, and Bush would face an uphill fight in renewing it.
Perhaps more important, the recent failure to narrow differences virtually ensures that any agreement that the round produces will be modest in scope, according to many trade experts.
A big stumbling block is the E.U.'s unwillingness to cut duties on farm products as deeply as other WTO members, including the United States, have proposed to do. Although many developing countries have denounced the European stance as frustrating to their main goal in the talks, the E.U. has insisted that it can go no further. French officials -- the most militant in Europe about protecting farmers -- have sworn to block any final agreement that goes beyond the E.U.'s current position on agriculture.
"I still think they'll pull something together eventually, but the chances for something very substantial is diminished," said Gary C. Hufbauer, a scholar at the Institute for International Economics. "If this really is the E.U.'s bottom line, this thing will be lucky to limp to some gentlemanly signature on a piece of paper."
The Hong Kong meeting was supposed to generate an accord on the "modalities" of a final agreement -- the type of formulas that would be used in cutting tariffs, for example, and agreements on how many politically "sensitive" products each WTO member could shelter under high tariff walls. Without such an understanding, filling in final details is almost impossible.
Even though it may only go part way toward bridging divides, "the Hong Kong meeting is still very much on," U.S. Trade Representative Rob Portman said. Johanns added: "It would be a grave mistake to declare this round at an end at the Hong Kong meeting. There is still an entire year ahead of us when we can work aggressively to have a successful Doha round. We are committed to doing that."
Mandelson, however, acknowledged: "My fear is that in lowering expectations for Hong Kong, we will cause the overall ambition for the round to fall."
Seeking to deflect blame for the outcome, he contended the main problem was the refusal of a group of developing countries led by Brazil to open their markets for services and industrial goods. Although Brazilian Foreign Minister Celso Amorim said he had offered to cut duties on manufactured goods by an average of 50 percent, Mandelson retorted that Amorim "made no proposal and then what there was went up in smoke. . . . He circled around the subject and seemed to be opening the door but then made absolutely clear he was not making a proposal."
Amorim, however, joined U.S. officials in faulting Europe. Unless the E.U. improves its offer, it will take "not one month, two months, one year or two years to move the talks," he said, according to news service reports from Geneva. They "just won't move."