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G8 and G5 consensus to close the Doha Round trade talks next year

Friday, July 10th 2009 - 12:51 UTC
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A compromise must be reached before the G20 summit next September in Pittsburgh A compromise must be reached before the G20 summit next September in Pittsburgh

A consensus has emerged Thursday at the expanded Group of Eight summit in Italy on the need to close the Doha Round on world trade talks by the end of next year. The World Trade Organization (WTO) talks began in 2001 and were aimed at lowering trade barriers for agriculture and the services sector and to boost trade and development for poor countries.

However, negotiations stalled over farm tariffs and subsidies with the developed world locking horns with the developing economies to the point that the talks collapsed a year ago.

In order to overcome the deadlock, the second day of the three-day summit here saw the G8 (United States, Russia, Japan, German, Britain, France, Italy and Canada) joined by the G5 (China, India, Mexico, Brazil and South Africa) plus Egypt, which together form the G14.

A draft of a final statement from Thursday's encounter said it was agreed that G14 trade ministers would meet to try to reach a compromise before the September G20 in Pittsburgh.

Such a compromise would allow the G20 to then give WTO Director General Pascal Lamay a mandate to close the Doha Round next year. G20 is the G14 plus Argentina, Australia, Indonesia, Saudi Arabia and South Korea, while the 20th member is the European Union, represented by the country which holds the rotating presidency, currently Sweden.

“We are committed to seek an ambitious and balanced conclusion to the Doha Development Round in 2010, consistent with its mandate, building on the progress already made, including with regard to modalities”, said the joint declaration.

“We are committed to advance reform processes in international organisations, including the UN, to reflect contemporary reality and challenges thus enhancing their relevance, legitimacy and efficiency”.

G8 countries also agreed to some of the major demands made by the G5 countries on tackling the present global economic crisis. “

“We have acted more forcefully and cooperated more fully than in any earlier economic crisis. We are fully committed to implementing rapidly the Washington and the London summit decisions, including those to strengthen financial regulation and reform International Financial Institutions (IFIs), and to provide them with adequate resources”.

“It is further important to ensure that developing economies, in particular low income countries, are able to cope with the effects of the crisis” the declaration said.

A strong commitment towards reforms in international financial and other institutions was also included. It said that all participating countries would refrain from competitive devaluations of currencies and promote a stable and well-functioning international monetary system.

The Doha Round was also be on the agenda late Thursday at a meeting of the 17-nation Major Economies Forum (MEF) which will be chaired by US President Barack Obama and include the participation of the WTO.

The MEF members are Australia, Brazil, Britain, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa and the United States.

In a statement issued before the MEF meeting, the EU said that concluding the Doha Round was a question of ''political credibility'' and represented ''the best remedy'' to protectionist temptations.

Categories: Economy, International.

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