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Key WTO Members Fail to Resolve Differences Over Trade Round

A meeting of five key trading nations has failed to strike a deal that could salvage the Hong Kong Ministerial which next month will review progress in the Doha Round of free trade negotiations. But, the chief US negotiator says differences were narrowed.

The United States played host to Brazil, the European Union, India and Japan in one of, what is likely to be, a rash of crisis meetings leading up to next month's trade summit in Hong Kong.

Hope is fading that a document leading to a global trade deal can be nailed down during the summit. But, World Trade Organization members believe it still is possible to arrive at agreements that will avert the kind of collapse that occurred during the 2003 summit in Cancun, Mexico.

U.S. Trade Representative, Rob Portman, acknowledges the issues are difficult and the discussions that lie ahead will be tough. But, he says he believes the world's trading nations can come together in Hong Kong and do better than they did in Cancun.

"I think expectations for Hong Kong are relatively low," he said. "That is probably good in the sense that we are not going to be able to reach the full modalities that we hoped for. So, why keep expectations very, very high if we cannot meet them. On the other hand, I think we can show progress. You know this Cancun developing countries versus developed country split, I do not think will happen in Hong Kong. I just do not think we are looking at that dynamic."

Cancun broke up after developing countries refused to sign on to the trade offers made by the rich countries. Many of the same differences remain. Developing countries want the United States, European Union and other industrialized countries to make big cuts in tariffs and subsidies for farm goods. In return, the rich countries want concessions from poorer nations on market access for manufactured goods. They also want them to open up their service industries to international trade.

The poorer countries also are concerned over the ongoing dispute between the United States and European Union over farm subsidies. These two powerful trading partners remain at loggerheads over cuts in trade distorting subsidies.

Mr. Portman says it is essential that these issues be resolved. He says the world will benefit greatly from the successful completion of the Doha Round.

"We think the successful completion of Doha is the single most important element to increase in global economic growth," he said. "We can think of nothing that is more important to the global economy than reducing barriers to trade. And, finally, we think the development aspects are absolutely crucial in order to lift literally hundreds of millions of people out of poverty, we must think of ways to reduce barriers to trade and improve economic growth."

Mr. Portman says Hong Kong must be more than just a simple stock-taking exercise. He says it is important that Hong Kong create a road map for negotiations to be completed by the end of 2006.