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US Official says Trade Talks in Crisis


US Trade Representative Susan Schwab said Friday that the long deadlocked Doha Round of negotiations to expand global trade could fail.

Ms. Schwab made clear that the United States is hopeful that a deal can still be reached. But she said the mood at last week's negotiating session in Geneva was not positive. Only when that session ended, she said, did trade ministers seem to realize that a crisis was at hand.

"Maybe we all needed to get to the edge of the precipice and look out over the precipice and see that, yes, in fact this could fail," she said.

The World Trade Organization talks were launched in Doha, Qatar in 2001. They are deadlocked by disputes over agricultural subsidies in the United States and Europe and the refusal of developing countries to significantly open their closed markets. Scott Miller, of Procter and Gamble (a big U.S.-based consumer products firm), has organized a business coalition in support of the Doha round.

"I think a statement out of the G8 summit [July 15 in St. Petersburg] would be very helpful," he said. "Certainly the round has gone on for four [and]-one-half years. We're disappointed in the progress made thus far. And a jolt to the system, I think, would be quite useful."

Trade representative Schwab dismissed criticism that the US is pushing too hard for market access in developing countries. Instead, she said, developing countries would be equal winners from expanded trade.

"They [developing countries] not only have the most to gain from a successful Doha round, they have the most to lose from a failed Doha round. I will be totally up front with you: We are running out of time," she said.

Ms. Schwab spoke at a business coalition meeting in Washington. Trade officials generally agree that if the negotiations are to succeed there must be a significant breakthrough by the end of this month.

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