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WTO Deal Elusive
Need for Redrafting ÒTotal MessÓ
Speculators Pushing Up Oil Prices
Fuel Strikes Across Europe
Spain to Stimulate Economic Growth
Chinese Export Growth Weakens

WTO Deal Elusive
Need for Redrafting ÒTotal MessÓ
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Publication of new texts on agriculture and industrial goods, clarified remaining obstacles to an agreement in the Doha trade round.
The WTO has finally created unity among its 152 members--but unfortunately for head Pascal Lamy, the only thing all states agree on is that the prospect of a new trade deal is still as far away as ever.
Lamy said the publication of new texts on agriculture and industrial goods--key sticking points for nearly seven years of torturous negotiations--clarified remaining obstacles to an agreement in the Doha trade round, AFP worte.
ÒThese revised negotiating texts illustrate clearly where convergence lies among the WTO members ... we are getting closer to our end game,Ó Lamy said.
The round was launched in the Qatari capital in November 2001 with the aim of reaching a deal by 2004.
But it has foundered ever since, mainly over disputes between developed and developing countries on agricultural subsidies and industrial tariffs.
The WTO chief has long said a deal is Òdoable,Ó and has made it clear he would like to see Doha wrapped up before US President George W. Bush leaves office early in 2009.
But his was a lone voice of optimism this week as key WTO members made clear their objections to the texts, casting further doubt on the likelihood of any imminent breakthrough.
ÒThe new draft texts on agriculture and manufacturing are disappointing,Ó said top US trade official Susan Schwab.
ÒUnfortunately recent developments in Geneva have moved the negotiations in the direction of less balance and less market access,Ó she bemoaned.
The European Union has been a main advocate of trade liberalization but there are increasing signs of hostility among some of its 27-member states.
French trade minister Anne-Marie Idrac said that Òwe have a lot of questionsÓ about the agriculture proposals and Òfor us French thereÕs no improvement on market access for our industrial goods to emerging markets.Ó
Ireland, where farmers constitute a significant political lobby, cast doubt on the wisdom of a deal at all costs.
ÒOur view is you need substance. ItÕs not about completing this just because thereÕs six months left for the US presidency,Ó new foreign minister Michael Martin said in Brussels this week.
Asked if he thought therefore that it would be wise to wait until after the US election he replied Òthat would be my view, yes.Ó
Developing countries were also forthright in their criticism, with Indian commerce secretary G.K. Pillai slamming proposed tariff cuts on industrial goods as a Òtotal messÓ that need to be redrafted.
The latest text on industrial goods--known as non-agricultural market access (NAMA) in WTO parlance--proposes that about 30 emerging market countries would agree to reduce their customs duties to a maximum level of 19 to 26 percent. The more the tariffs are lowered, the greater would be the right of governments to protect certain ÒsensitiveÓ items.
WTO sources sought to portray the various reactions to the texts as just posturing, but other observers believe that time is rapidly running out for any deal this year.
Lamy had initially hoped to bring ministers to Geneva over Easter to hammer out ÒmodalitiesÓ--the key numbers for tariff cuts that would form the basis for any comprehensive deal.
The timetable has repeatedly had to be put back as the WTOÕs 152 member states prove incapable of reaching consensus despite intensive technical discussions.

Speculators Pushing Up Oil Prices
OPEC President Chakib Khelil again blamed speculators for the steep rise in oil prices Saturday, insisting that supply was not a problem.
ÒThere is no problem of supply, the problem is much more linked to speculation,Ó he told a press conference with visiting French ecology and energy minister Jean-Louis Borloo, AFP reported.
He also said the price of oil was closely linked to the exchange rate of the US dollar, which has fallen steeply against other major currencies.
ÒThe consensus is that the crisis is not over and there is going to be a continuing impact on the prices of oil because of speculation,Ó he added.
Khelil, who is also the Algerian energy minister, had made similar remarks on Monday in an interview with Spanish national radio.
ÒIf OPEC decides to raise production ... these hikes will not really lower the price,Ó he said then.
He said Saturday that the organization of producer nations would not review the situation again until it meets in Vienna on September 9.

Fuel Strikes Across Europe
An all-out strike by Spanish fishermen, who operate EuropeÕs largest fishing fleet, went into a second day Saturday, amid protests on land and at sea across Europe at rocketing fuel prices.
Virtually all Portuguese trawlers were also staying in harbor, union officials said, whilst striking Italian fishermen managed to delay the start of a sailing race in the Mediterranean.
According to AFP, the rapid rise in the price of oil has pushed up the cost of marine diesel by around 30 percent since the beginning of the year, causing trawler owners to warn they face bankruptcy without increased subsidies.
French fishermen have been on strike for two weeks, whilst in eastern France a Saturday morning go-slow by around 100 lorries jammed up major roads in the Lorraine region, according to organizers.
While most French fishermen along the Atlantic and Channel coasts are returning to work, those in the Normandy port of Cherbourg and in west-coast Saint Brieuc have voted to continue their strike action until Monday, their local representatives said.

Spain to Stimulate Economic Growth
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Spanish Prime Minister Jose Luis Rodriguez Zapatero said his government is planning new measures to stimulate economic growth and make Spanish business more competitive.
The Òambitious package of reformsÓ will be approved by his Socialist government within a month, Zapatero told an economic forum in the northeastern city of Barcelona, AFP reported.
The measures will include a 30-percent reduction in administrative charges to businesses, as well as steps to stimulate the transport of goods by rail and to increase competition in the telecommunications sector.
Such initiatives Òwill lead to a rise in business productivityÓ and Òan improvement in competivityÓ which could boost gross domestic product by 2.0 percent, said Zapatero, whose Socialists won re-election in March.
The measures will be incorporated into a Ònational program of reforms which will be presented to the European Commission in October,Ó the prime minister said.

Chinese Export Growth Weakens
Manufacturing in China, the worldÕs fastest-growing major economy, expanded at a slower pace in May as export growth weakened.
The Purchasing ManagersÕ Index fell to 53.3 from a record 59.2 in April, the China Federation of Logistics and Purchasing said today in an e-mailed statement, Bloomberg reported.
Weaker expansions in economies around the world are cooling demand for made-in-China goods, leading the central bank to last week forecast a ``moderateÕÕ slowing of economic growth this year. Indexes of new orders, export orders, and output all fell in todayÕs survey.
``We expect Chinese exports to continue slowing for the rest of this year, as US housing prices and consumption decline,ÕÕ said Xing Ziqiang, a Beijing-based economist at China International Capital Corp.
Xing said the May 12 earthquake that devastated parts of Sichuan province was a factor in the slowing. The federationÕs statement didnÕt mention it.
The index of export orders fell to 53.4 from 58.9. The index of new orders declined to 55.4 from 65. The output index dropped to 55.7 from 66.5.

DAE to Buy 50 Aircrafts
State-controlled Dubai Aerospace Enterprise (DAE) said it was in talks to buy 50 aircraft worth about $2.5 billion to expand its leasing business.

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Beef Protests Continue in S. Korea
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South Korean police have fired water cannons and arrested more than 200 people who were protesting against plans to resume US beef imports.
Some 20,000 people had gathered in Seoul to demonstrate, in the latest in a series of protests, BBC wrote.
Protesters who then tried to march on the presidential Blue House were blocked by police, prompting clashes in which 228 people were detained.
The demonstrators say the plan fails to protect against mad cow disease. SeoulÕs beef market was closed to US imports in 2003 after the first US case of the disease was found in a Canadian-born cow in Washington state.

Myanmar Cyclone Raises Forced Labor Risk
The International Labor Organization expressed its concern Saturday that the Myanmar ruling military junta will use forced labor to rebuild areas of the country devastated by Cyclone Nargis.
The cylone left 133,000 people dead or missing when it pounded into Myanmar on May 2-3, destroying entire villages and laying waste to the countryÕs rice-growing region, AFP reported. The ruling junta has already been harshly criticized for blocking entry to foreign aid in the crucial hours following the disaster, which US Defence Secretary Robert Gates on Saturday said cost Òtens of thousands of livesÓ.
The ILO says there is a risk that the reconstruction of Myanmar will involve further injustices if it is not closely watched over.

Oil Shock Boosts Carbon Market
After slumping to prices that had made it a near-laughing stock, the European UnionÕs carbon market, the Emissions Trading System (ETS), has been given a useful boost by, of all things, oil.
In the last three months, the cost of buying a ton of carbon dioxide (CO2) has raced upwards by more than 25 percent, according to Paris-based carbon bourse BlueNext, AP reported.
Damien Demailly, in charge of the energy and climate program with green group WWF-France, says the hike has been driven by electricity producers who have turned away from gas, whose price is indexed on oil, in favor of coal.

Saudis Have No De-Pegging Plan
US Treasury Secretary Henry Paulson and Saudi Arabian Finance Minister Ibrahim Al-Assaf agreed that the Persian Gulf kingdom benefits from keeping its currency pegged to the dollar.
According to Bloomberg, the riyalÕs peg Òhas served this country and the region well,ÕÕ Paulson said at a joint press conference in Jeddah. ÒI totally agree with Secretary Paulson,ÕÕ al-Assaf said. ÒAs we have said many times, we have no intention of de-pegging or of revaluation.ÕÕ
Paulson is getting an update on the fixed exchange rates retained by most oil-rich nations in the Middle East on his four-day trip to the region.