MercoPress. South Atlantic News Agency

WTO optimistic about Doha accord before 2008 is over

WTO director general Pascal Lamy

World Trade Organisation director general Pascal Lamy said it is still possible that trade ministers could meet this month to work out the outlines of an agreement in the Doha Round of world trade talks.

"It is still do-able. Political leaders are all agreed that the negotiations must be concluded by the end of the year and that there must be a deal before that on three of the twenty subjects on the table -- agricultural subsidies, agricultural tariffs and industrial tariffs," he said in an interview with French daily Les Echos. "To finish by the end of the year, we must reach an agreement in May or June, because it will take six to seven months from the political agreement to the end of the round. After that, we would be entering the danger zone", he said. "We have the political and technical conditions to conclude the round in 2008. This was not always the case". In related news WTO said on Wednesday that China would benefit from a more flexible foreign exchange regime which would allow it to use monetary policy more effectively to tackle inflation. The Chinese central bank's ability to use interest rates as effective monetary policy instrument is limited because of the exchange rate regime, according to a trade policy review of China. The Yuan is allowed to fluctuate by 0.5% from its mid-point each day, in what is known as a crawling peg regime. China's central bank has said it has a long-standing aim of improving the exchange rate regime, and is currently tightening monetary policy to fight inflation. "A more flexible exchange rate and thus more independent monetary policy would complement structural reforms, especially those concerning the capital market, and obviate the need for price controls and other non-market measures to contain inflation," the WTO said. The WTO said there were already signs that China's currency regime was becoming more flexible. The Yuan appreciated by nearly 1.6% against the US dollar in January this year, its biggest monthly increase since the current regime was introduced in July 2005.