Emad Mekay

WASHINGTON, Jul 29 2006 (IPS) — Despite the acrimonious collapse of an agreement on new global trade rules earlier this week, major European and U.S. business lobbies are joining forces to try and revive the World Trade Organisation (WTO) talks, whose complete failure could spell the loss of major market profits in developing nations.

The talks, dubbed the Doha Development Agenda (DDA) when they were launched in the Qatari capital in 2001, were suspended on Monday after the world’s richest nations failed to agree on a formula to cut their highly contentious farm subsidies and open their own markets.

U.S. and European companies that invested much time and effort in prodding their government officials to conclude a deal that would expand global markets for their products were visibly alarmed. But now these groups are coming together to try to resuscitate the sweeping deal, which covers goods ranging from farm products to textiles and electronics, as well as services like architecture, voice-mail telecommunications and space transport.

“The suspension of the talks could lead to a failure of the Doha Round, which would undermine the promise of economic growth inherent in the DDA, and result in the loss of opportunities for WTO members to gain the tremendous benefits that accrue from trade liberalisation,” said a joint statement by seven of the world’s largest business groups.

“In order to avoid this situation, we strongly hope that the negotiations will resume as early as possible,” it added.

The organisations include the Business Roundtable, the United States Chamber of Commerce and National Association of Manufacturers, all powerful business pressure groups from the United States.

The Confederation of European Business, which represents more than 20 million companies in the European Union, also signed the statement.

The Business Council of Australia, the Australian Services Roundtable and Nippon Keidanren, a key Japanese pressure group, along with the Brazilian National Confederation of Industry and the Federation of Industries of the State of São Paulo (FIESP), the only two groups from a developing country, all joined in as well.

Earlier, the Paris-based International Chamber of Commerce (ICC) called for a quick resumption of the Doha talks, warning that the breakdown opens the door to a surge in bilateral trade agreements, more trade disputes and a resurgence of protectionism and the possible weakening of the effectiveness and authority of the Geneva-based WTO.

“Historically, it has been the multilateral trading system that has generated global economic growth. We will continue to fight for that system,” said ICC Chairman Marcus Wallenberg, who is also the chairman of Saab and of SEB, the Swedish banking giant.

What these business organisations fear most is a new wave of protectionist measures that could erode their power and access to markets and therefore lower profits.

“ICC firmly believes there is no substitute for a strong rules-based, non-discriminatory multilateral trading system,” the group said.

Norman Sorensen, chairman of the Coalition of Service Industries (CSI) in the U.S., says that because “trade liberalisation is essential for the U.S. and global economies,” the Doha talks must rebound. Otherwise, “The opportunity to obtain new commercial opportunities across the range of service sectors is in danger of being lost.”

With services accounting for about 40 percent of global employment, and 80 percent of the jobs and economy in the United States alone, it is little wonder his group is keen to restart the talks. CSI estimates that liberalising the global trade in services has potential profits of 1.7 trillion dollars.

The Business and Industry Advisory Committee, which advises the Paris-based Organisation for Economic Cooperation and Development (OECD), urged the countries involved to “avoid any new protectionist measures during the period of suspension.”

“OECD business urges governments to keep the present offers on the table and to seek new political initiatives to restart these negotiations as soon as possible,” it said.

Most of these groups urged what they called “fresh approaches” to resume the Doha Round negotiations as soon as possible and on the basis of the progress already achieved.

The United States seemed to be the most responsive to their calls. U.S. Trade Representative Susan Schwab is already in Brazil on the first of several trips that her office says are aimed at sustaining support for the global trade and development goals of the WTO’s agenda.

Washington hopes to win concessions from Brazil, a major player in rallying opposition to the current WTO rules that many critics say favour industrialised countries.

“The spirit of Doha lives even if a formal agreement eludes us at this time,” said Schwab.

In August, Schwab will meet with trade ministers from the Association of South East Asian Nations. In September, she and U.S. Secretary of Agriculture Mike Johanns will visit members of the Cairns Group of agricultural-exporting nations in Australia.

In November, Schwab will accompany Secretary of State Condoleezza Rice to a meeting of trade ministers and other leaders of the Asia-Pacific Economic Cooperation group.

U.S. President George W. Bush also lent his support to the failing process. He told the National Association of Manufacturers on Thursday that he remained a big believer in free trade.

“We’ll continue to work on this agreement,” he said. “Secretary of Agriculture Mike Johanns, as well, will continue to reach out to other nations to achieve our objectives.”

On Friday, WTO chief Pascal Lamy appeared to be reading from the business groups’ pages.

“We must now ensure that this progress does not unravel,” he said, pledging to do his best to “permit a resumption of the negotiations”.