Doha talks in 2011 hinge on US politics-India

Rahul Khullar told reporters in an interview that Washington has dented chances of progress in the talks with unrealistic demands in the time since New Delhi hosted a Doha meeting last September, echoing recent comments by a Chinese trade official.

The Doha round has progressed in fits and starts since its inception in 2001 amid differences over market access and tariffs between Washington and major developing countries such as India, China and Brazil.

In a sign of the bleak prospects for a Doha deal any time soon, G20 leaders recently dropped their reference to 2010 as a target date for completion of the talks and set no new date.

Khullar said there would probably be “pretences of movement” in upcoming talks before the US goes to the polls.

“There is no guarantee whatever of closing this deal by December 2010, thereafter it is contingent on political developments,” said Khullar, a top civil servant who is key to Indian negotiations.

“Supposing the election results are a complete disaster for the (Obama) administration? A government which is not willing to engage today, what is the likelihood of their intensively engaging tomorrow?”

Few votes are currently to be won over trade in the US, where labour unions and other core Democratic constituencies remain suspicious of new trade deals.

Trade is such a sensitive topic that Obama may prefer not to argue for a new deal even next year, as he readies for a re-election bid in 2012, though US industry lobbyists have recently expressed optimism about Doha’s prospects next year.

Speaking about the likely outcome of negotiations ahead of the November polls, Khullar said:

“Some differences will narrow. What you will end up seeing is that on a couple of issues you will actually get some progress. And on some other issues there will either be no engagement, or there will be stalemate.”

Washington and Beijing have traded accusations that the other is blocking agreement on Doha, signalling frustration on the slow progress in a public war of words.

Obama in June called for substantial changes to the current negotiations, saying what was currently on the table was inadequate.

But Khullar said Washington’s efforts to bridge gaps in the Doha round through bilateral negotiations had fizzled out.

“The United States wants a bilateral is a euphemism for ‘please will the party I am negotiating with give me what I want’,” he said.

“If all you’re saying is give me more to keep me happy’, at some point of time the bilateral is going to run out of steam. And that’s exactly what happened with all these bilaterals.”

Washington wants greater access in particular for chemicals, pharmaceuticals, medical devices, forestry products, and construction and agricultural equipment, making different requests to different countries.

In the backdrop of slow progress in the Doha round, India has pushed ahead with negotiating bilateral free trade agreements, including with the European Union, its largest trade partner.

Khullar said he was “optimistic” about finalising a deal with the EU by the stated target of October. But he also said recent  moves to restrict Indian exports such as grapes on dubious grounds had emerged as a potential obstacle.

“If there is going to be this lingering suspicion that every time I try to get market access to Europe, you are going to erect a non-trade barrier, this deal is not going to happen,” he said.