GENEVA—The World Trade Organisation cannot offer any immediate easing of soaring food prices but a deal in the Doha round to open up world trade could bring long-term solutions, the WTO's chief said on Wednesday.
However to meet its goal of concluding the long-running talks this year, the WTO needed a breakthrough within weeks, Pascal Lamy told the WTO's policy-making general council, according to a copy of his remarks obtained by Reuters.
"Although the WTO cannot provide anything immediate to help solve the current crisis, it can, through the Doha Round negotiations, provide medium to long-term solutions," Lamy said.
A new trade deal would help soften the impact of high prices by lowering barriers to trade in agricultural products, including trade-distorting subsidies in rich countries, he said.
"This is doable and we are nearly there," Lamy said. "As you are all aware, the overall outcome would be less distortion in world markets and increased international trade, leading to more rapid and efficient adjustment by supply to changes in demand."
Weeks Not Months
Staple food prices have risen more than 40 percent in the last year causing shortages, hoarding and riots in many developing countries, and prompting the United Nations to warn of malnutrition and social unrest.
Many countries have responded by slapping taxes and other restrictions on food exports—allowed under WTO rules—to try and ensure supplies at home.
Lamy said it was necessary for ministers to agree the outlines, or "modalities" of a deal very soon to allow time for the detailed work to be completed by the end of 2008.
Many trade negotiators say the talks, which were launched in November 2001 and have since missed many deadlines, will go into a deep freeze if they are not completed this year, as next year will see a new U.S. administration, changes in the European Union's executive commission and elections in India.
"If we are to meet the collective target we have of concluding the Round by the end of 2008 ... we have only a few weeks, not months or semesters, in which to establish modalities," Lamy said. "This is a very tight schedule, but it is still doable."
Officials had pencilled in the week of May 19 for the ministerial talks, which would agree the big political numbers for tariff and subsidy cuts in farm and industrial goods, known in trade jargon as NAMA, and signal possible deals in services such as banking and telecoms.
But negotiators are still trying to reach agreement on several complex technical issues in agriculture, such as how to shield politically sensitive farm products from the full impact of tariff cuts, and that is pushing back the date for ministers.
The problem is it cannot slip more than a week. With the Euro2008 soccer championships due in Switzerland in early June, hotels are booked and Swiss security will be stretched.
Some negotiators said a meeting of ministers could still be held in late June. "The logistics are forcing Lamy to change his timetable," said one African negotiator.
But several diplomats warned the whole round risked unravelling if ministers were called in prematurely.
"It would be difficult for us to succeed in the negotiating process if members fail to bridge the gaps in the key areas of agriculture and NAMA," Chinese ambassador Sun Zhenyu told the council, according to a text of his remarks.
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