Mandelson warns EU of talks breakdown

LUXEMBOURG: European Union Trade Commissioner Peter Mandelson urged the 27 EU nations on Monday to show flexibility at an upcoming meeting with major negotiating partners or risk the collapse of WTO talks.

Addressing EU foreign ministers gathered in Brussels, Mandelson said there were three possible outcomes of the G4 talks in Potsdam, Germany - between the EU, the US, Brazil and India -- including total failure, a diplomat said.

"If each partner negotiates to the limits of their flexibility," then the talks, which open on Tuesday, will be a success, Mandelson told the EU ministers.

Alternatively there could be the sort of "incremental progress" which falls short of an agreement, in which case a further G4 meeting could be held in July.

In the worst-case scenario, with no common ground found, WTO chief Pascal Lamy "will be in a position to take the initiative and put more pressure on the EU concerning agriculture," Mandelson was quoted as saying.
British, Dutch and Swedish ministers stressed their support for the EU commission's line, while France and Ireland -- nations with big agricultural sectors -- expressed their reserves at the idea of offering too much flexibility.

France voiced its fears of an "unbalanced" agreement which would benefit emerging powers -- such as China, India and Brazil -- but not the world's poorest and hurt the EU's "social and economic interests", the diplomatic source said.

The four main players in the Doha round of trade talks are at odds over levels of agricultural subsidies and market access.

The developing countries and wealthy nations are largely at loggerheads over the degree of state support for agricultural markets along with the level of protection against imports, mainly in the European Union and the United States.

Rich nations meanwhile are looking for more concessions from developing nations on access to their markets for industrial goods.

The hope is that if a G4 agreement can be reached then the rest of the WTO members will fall into line.
Mandelson warned that the window of opportunity on reaching a deal was narrowing.

"If the Doha round collapses then there will be recriminations with the EU and the US the targets of developing nations," Mandelson warned.

He said that WTO member states still hoped to conclude the Doha round, launched in 2001, this year.