US expresses support for transatlantic free trade zone
Financial Times | Sept. 20, 2006
US expresses support for transatlantic free trade zone
By Raphael Minder in Cairns, Australia, and Andrew Bounds in Brussels
Susan Schwab, US trade representative, on Wednesday welcomed the news that Germany was considering reviving plans for a transatlantic single market, saying these were unlikely to clash with attempts to relaunch the Doha round of multilateral trade talks.
While stressing that she had yet to see any details, Ms Schwab said in an interview with the Financial Times: "Initiatives that are likely to enhance global trade and contribute to more open trade - bilaterally, regionally or above all multilaterally - are positive developments. Contributions to more market liberalisation are always going to be positive."
She added: "I don’t think that [Chancellor Angela] Merkel was in any way undermining the multilateral dialogue or Germany’s support for the Doha round of negotiations.’’
The FT reported on Saturday that Germany could relaunch a 1998 plan for a transatlantic free trade zone when it takes up the rotating EU presidency next January.
The plan foundered on disagreements over agricultural tariffs but many in Mrs Merkel’s Christian Democratic party believe a less ambitious proposal abolishing non-tariff barriers only could find favour.
Senior European Commission officials, however, said they felt any move would be seen as rewarding Washington, which they blame for the Doha talks’ collapse.
"Such a negotiation between the two major trade powers would suck energy out of the multilateral system. Working together to promote trade with China and other emerging economies is probably a higher priority," said one, noting that the EU and US could soon be competing to sign bilateral trade deals with India and other big emerging economies.
The prospects for reviving Doha appear bleak. Mike Johanns, the US secretary of agriculture, said it was "a fallacy’’ to argue that the outcome of the US mid-term elections could influence them. He and Ms Schwab noted that, even if a Doha agreement had been reached last July, it would still have had to be vetted by Congress after the November polls.
Australia, which is chairing this week’s meeting of the Cairns Group of 18 agricultural exporters, is trying to reignite the talks with a so-called "five-and-five’’ initiative, which would require the US to add $5bn to its proposal to cut domestic farm subsidies while the EU would have to improve its offer to lower farm tariffs by a further 5 per cent. But Ms Schwab said: "We are not in a position to endorse it. It would be very hard to do under any circumstances."
Separately, Ms Schwab said she was optimistic that Washington and Moscow would reach "a breakthrough’’ in their talks at the end of October that could clear the way for Russia to join the WTO.
Negotiations stumbled in July over agricultural sanitary issues, but Ms Schwab said on Wednesday that ``we would like to see Russia a member of the WTO... It would be great to get it done then [in October] and both sides are hopeful that we can reach closure.’’
