The European Union said Monday it will slash farm tariffs by 60 per cent, an offer meant to kickstart talks in Geneva over a new world trade pact.
More than 30 trade officials have gathered in the Swiss city for a week-long session described as a make-or-break World Trade Organization meeting to try to deliver a deal.
EU Trade Commissioner Peter Mandelson told reporters he hopes emerging economies like Brazil, India and China will respond by improving their offers on industrial tariffs. The EU has previously proposed a 54 per cent cut to tariffs.
Rich and poor countries have clashed repeatedly during the seven-year-long WTO talks on the so-called Doha Round. It was launched nearly seven years ago with the goal of helping developing countries prosper through trade and cutting farm subsidies and tariffs.
The 153-member international body, which deals with rules of trade between countries, is under pressure from the U.S. to produce a global trade deal before U.S. President George W. Bush finishes his time in office in January.
WTO Director-General Pascal Lamy said he gives this trade round more than a 50 per cent chance of succeeding. Talks have repeatedly stalled since its inception in Qatar's capital in 2001.
He warns that a failure to achieve a deal could leave the world with increasing protectionist tendencies, though he doesn't believe that any deal is better than none.
"What I am suggesting is that on the basis of what is on the table, an inability to come to a mutually beneficial and substantive deal would indeed be a dark signal," said Lamy.
Lamy says the benefits of trade have not been felt by every country, but believes a successful outcome is crucial for those countries who feel left behind.
Key sticking points in the Doha Round talks have been differences between rich and poor countries
Developing countries want rich ones to open their markets for food and to cut farm subsidies. In return, rich countries are demanding that developing countries cut tariffs on industrial goods and services.
As talks got underway Monday, the United States began pressing major developing countries for concessions in order to achieve a breakthrough in talks.
"To have a meaningful development outcome to this round … we know that we have to secure meaningful new market access in agriculture, manufacturing and services and that is particularly true when it comes to the interests of the developing countries," U.S. Trade Representative Susan Schwab said at a news conference, according to Reuters.
Reuters also cited Schwab as saying the U.S. is willing to cut its farm subsidies.
At the recent summit of Group of Eight industrial countries, Bush urged his fellow leaders to push forward on the stalled Doha Round talks.