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Global business group prods WTO to reach customs deal this year

The World Trade Organization WTO logo is seen at the entrance of the WTO headquarters in Geneva April 9, 2013. REUTERS/Ruben Sprich
The World Trade Organization WTO logo is seen at the entrance of the WTO headquarters in Geneva April 9, 2013. REUTERS/Ruben Sprich

By Doug Palmer

WASHINGTON (Reuters) - An international business group is urging World Trade Organization members to strike a deal to simplify global customs procedures at a trade ministers meeting in Bali in December to prove the WTO is still a force for trade liberalization.

"We think it's important, indeed indispensable, for the WTO to come out of Bali with something that the world will see as a positive result," said Jim Bacchus, a former WTO appellate body judge who now chairs the global investment and trade committee of the International Chamber of Commerce (ICC).

The group, which has members in more than 120 countries, will formally release its recommendations for a Bali package at its meeting next week in Doha, Qatar, where the unsuccessful Doha round of world trade talks was launched in late 2001.

It wants the WTO to wrap up the Doha round, even with a vastly scaled-down package, so that members of the world trade body can move on to new agenda of negotiations in areas such as services and green technology.

A study done for the ICC by the Peterson Institute for International Economics estimated a WTO "trade facilitation" package to simplify customs and other procedures for handling goods at the border could boost world exports by more than $1 trillion, including $570 billion for developing countries and $475 billion for developed countries.

The reforms also could increase global economic output by $960 billion and create about 21 million jobs, most of those in developing countries, the Washington-based think tank said.

While the Doha round has faltered, the United States, the European Union and more recently Japan have looked increasingly to regional trade agreements to create new export opportunities.

Michael Punke, the U.S. ambassador to the WTO, warned last week that the WTO's negotiating function was "hurtling toward irrelevance" because of sharp differences that have kept members from reaching a deal.

"If Bali fails, the signal that we will send, in a world full of fruitful trade negotiations, is that the WTO is the one place where trade negotiations don't succeed," Punke said.

The ICC also will recommend that developed countries agree in Bali to eliminate duties and quotas on at least 97 percent of exports from least-developed countries, following through on a pledge WTO members made in December 2005.

WTO members should also lock in another "conditional" agreement reached eight years to eliminate agricultural export subsidies, and take the additional step of committing to not impose export restrictions on food, the group said.

Current WTO Director General Pascal Lamy will be in Washington this week for the annual spring meeting of the International Monetary Fund and World Bank, where he is expected to give a sober assessment of the considerable amount of work to be done to reach a deal by Bali.

"The stark reality is that the current pace of work is largely insufficient to deliver successfully in Bali ... We need a change in mind-set. We need to move from 'exploring,' 'understanding' and 'discussing' issues to negotiating to closing gaps," Lamy said last week.

However, some trade experts fear WTO members could become distracted by a battle to succeed Lamy, who is stepping down later this year. Last week, the initial field of nine candidates for the post was whittled down to five from Brazil, South Korea, Mexico, Indonesia and New Zealand.

"It is critical that the director general appointment process go smoothly so that the transfer of responsibility from Pascal Lamy to the new DG can occur without loss of focus on the ongoing efforts to develop a package for Bali," Terry Stewart, a Washington trade attorney, said in his firm's newsletter.

(Reporting by Doug Palmer; Editing by Vicki Allen)

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