Thursday, May 05, 2005

Breakthrough in Doha Round talks

A breakthrough has been reached in a highly technical yet nevertheless important dispute about EU import tariffs that was holding up progress on the Doha Round. The deal was struck at a 'mini-minsterial' of thirty countries in Paris. It represented a compromise between the EU's views and those of agricultural exporting countries such as Brazil and Australia. Full details are not yet available.

EU trade commissioner Peter Mandelson gave ground on the issue of converting specific tariffs into ad valorem equivalents (expressed as a percentage of a product's value) so as to make it possible to pursue discussions on tariff reductions. The deal involved Mandelson taking risks as it is likely that tariffs will be reduced by a greater amount than the Commission had envisaged. However, market access is proving the most difficult agricultural issue in the Doha Round and something had to be done to break the log jam.

New USTR Robert Portman was seen as having played a key role in brokering the deal. He commented, 'It was a technical calculation, but had so many real-world impacts.'

The issue at stake was how to determine the import price to use for products such as meats and dairy products where the values may be distorted by tariff rate quotas, tariff preferences etc. The EU has the most specific tariffs of any WTO country, followed by Switzerland, the United States and Bulgaria.

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