Top trade officials from the United States, the European Union, Brazil and India on Tuesday launch an 11th-hour attempt at a breakthrough in world trade talks that have long teetered on the brink of collapse.
World Trade Organisation members pledged two months after the 2001 attacks on the United States to cut barriers to trade in the name of lifting poor countries out of poverty. Without a deal in principle by the end of July, WTO chief Pascal Lamy and others have warned the so-called Doha round could fail, stoking the danger of a revival of protectionism.
Meeting in a palace in Potsdam, near Berlin, where allied leaders plotted Europe's future after World War Two, the four core WTO members face an historic opportunity to turn years of ambiguous statements and lofty rhetoric into real commitments.
That means deciding issues like how deep the United States will cut farm subsidies, how far the EU will open its agricultural markets and what big developing countries will offer in return in agriculture, manufacturing and services.
Whether the so-called G4 group rises to the occasion over the five days of talks in Potsdam could decide the fate of the WTO's free trade push, called the Doha Development Agenda.
"This meeting of G4 negotiators cannot finish the Doha round, but it will determine if Doha can be finished," EU Trade Commissioner Peter Mandelson said on Monday. The White House's 'fast track' trade negotiating power has effectively expired and many now doubt the round can be saved. Officials warn of years of further delay without a breakthrough very soon, due to elections in key WTO countries.
"You'd have to be a fool not to be sceptical," said Claude Barfield, an analyst at the American Enterprise Institute. "There have been all these deadlines they were supposed to meet and they've blown through them all."
Experts expect a result in Potsdam, one way or the other. "When you put the top people of the big WTO players in a room together for five days, something has to happen, but that does not mean it has to be positive," an EU trade diplomat said.
WTO boss Lamy has sounded more upbeat in recent weeks. He suspended the talks last July after trade powers stumbled again over agriculture which developing countries led by Brazil and India say must be resolved first. Negotiations between the WTO's 150 members formally resumed in Geneva in January. But the focus remains on the so-called G4 countries to agree on the broad terms of a package this week.
Talks have shifted over the past year away from overall formulae for cutting farm subsidies and tariffs to exploration of how to handle the most contentious commodities in the talks.
They potentially include items like beef, poultry and dairy products for the European Union and wheat and rice for India. If you can resolve how to handle them "you should be able to achieve maximum ambition for everything else," US Trade Representative Susan Schwab told Reuters last week.
Still, negotiators have big gaps to narrow. India wants developing countries to be able to designate 20 percent of farm tariffs as "special products" - half subject to reduced tariff cuts, the other half with no cuts at all.
The United States is being pressed to cut at least a further $5 billion from its plan to cap its trade-distorting farm subsidies at $22.5 billion annually. On services and manufacturing, big developing countries are under pressure to open their markets, including a cap on manufacturing tariffs of no more than 20 percent.
The United States and the EU have expressed concern that the negotiations could flounder if countries such as Brazil refuse to offer bigger cuts to import tariffs of manufactured goods.
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