Davos gathering: New trade round seen as distant

By Robert Evans

DAVOS, Switzerland (Reuters): World trade leaders believe there is little chance a new round of trade negotiations can be launched before late next year at the earliest, despite high- profile demands for a quick start.

Ministers and officials from the 135 member countries of the World Trade Organization (WTO) attending the annual Davos gathering of political and business leaders agree that differences between them look hard to bridge right now.

And in speeches and interviews, they have made clear they accept that long preparation is essential to avoid a repetition of the collapse of a WTO ministerial meeting in Seattle last month that had been called to kick off a "Millennium Round."

"We must not allow ourselves to become captives of a time- frame," Switzerland's Economy Minister Pascal Couchepin told Reuters. "We must not put ourselves under pressure. There is no urgency about reaching results very quickly."

Couchepin suggested the next WTO ministerial, due by November 2001, two years after Seattle, would be the most reasonable target to aim for -- a view shared by other smaller but economically influential states.

Mexico's President Ernesto Zedillo, in a ringing speech that reflected the views of most developing countries in the WTO where they make up three quarters of the membership, reaffirmed his country's enthusiasm for negotiations to lower barriers to trade in goods and services.

But he fiercely rejected -- in terms echoed by officials from other emerging economies in Davos -- insistence by the United States that a new round would have to cover the controversial issues of labor conditions and environment.

Poorer countries see U.S.-driven efforts to make labor and environmental standards enforceable through WTO rules as primarily aimed at pushing up the cost of their products and keep them from competing on Western markets.

Even U.S. Trade Representative Charlene Barshefsky, speaking a day after President Bill Clinton set out his wish-list for a round he said he would like to see start this year, recognized the problems ahead.

"The developing world is not hearing what we're saying, and we're not hearing what the developing world is saying. We're passing like ships in the night," she said after an informal Sunday meeting of trade ministers at the World Economic Forum.

Poorer countries say they resent Washington pressure on the labor and environment issues, which they see as reflecting U.S. domestic politics -- although they recognize Clinton's Davos speech marked a change from the harder line he took in Seattle.

"Why should the U.S. think it is more concerned for the welfare of the peoples of our countries than we are?" asked one African trade diplomat.

WTO officials were encouraged by the ringing endorsement Clinton voiced for the organization and its free trade rules all members agree to observe. "That was very welcome," said one aide to the WTO's beleaguered Director-General Mike Moore.

In Seattle, implicitly sympathizing with sometimes violent anti-WTO demonstrations, he had given the body no such comfort.

Negotiators from North and South who were in Seattle, the five-year-old WTO's third Ministerial Meeting, agreed that the failure to agree on a round there was due primarily to differences between the United States and the European Union.

Some proponents of early relaunch efforts took heart when EU Trade Commissioner Pascal Lamy -- four days before Clinton spoke in Davos -- said last week that Brussels would like to get a round going this year.

However, since Seattle, there has been little sign that the two biggest trade powers have come any closer on issues like farm subsidies and whether talks on getting rules on competition policy and investment should be on the agenda for a round.

Lamy and EU Commission President Romano Prodi unexpectedly stayed away from Davos -- a break with tradition as their predecessors were regular participants.

But Clinton fired a barb at Brussels, saying it should stop refusing to move towards abolishing export subsidies to its farmers -- a position the EU shares with Switzerland, Norway, Japan and South Korea.

Speaking to the Forum last Friday, Moore himself recognized the task ahead. The time was not right in Seattle, he said, adding: "We were just too far apart on many issues."

And summing up the front and backstage discussions in Davos on the future, U.S. Senator and free trade advocate John Kerry said all WTO countries had to settle their differences before trying to agree on a new round.

"We should not go to the next meeting without a bird in hand," he declared.