BRUSSELS -- In a sign that global trade talks may not be dead, a World Trade Organization envoy met with officials of the European Union to discuss ways of getting the talks moving again.
In the first formal, high-level meeting between the WTO and EU since the talks collapsed in September, Carlos Perez del Castillo, chairman of the WTO's General Council, met European Trade Commissioner Pascal Lamy and Agriculture Commissioner Franz Fischler in a step toward getting the EU back to the negotiating table. Mr. Lamy has been wary of jumping back into the game after being burned at the WTO's recent failed meeting in Cancun, Mexico.
The latest discussions come at a time of escalating trade tensions between the U.S. and the EU. The EU has proposed tariffs, starting in March, against U.S. goods ranging from steel to cosmetics. (See related article1.) The proposed tariffs are in retaliation for the U.S.'s so-called foreign sales corporation, or FSC, tax breaks, which benefit exporters such as Boeing Co. and Caterpillar Inc. Until now, the EU has held off on any retaliatory steps, hoping U.S. lawmakers would repeal the breaks by the end of the year. But now, the EU is ratcheting up the pressure. "We think it's a measured response and an incentive for the U.S. to comply," a commission official said.
While the U.S. and EU flirt with a trade war, Mr. Perez del Castillo has met with dozens of WTO members over the past several weeks, looking for ways to restart negotiations at the organization's Geneva headquarters. In talks with Messrs. Lamy and Fischler and members of the European Parliament, he offered ways of getting the talks on track before a Dec. 15 meeting of senior trade officials from its 148 members.
The most ambitious scenario is for an accord on a rough framework for continuing agriculture talks and an outline for pressing ahead with certain trade-opening measures known as Singapore issues, which include investment and government procurement.
A more modest option would be for trade officials to agree to start negotiating in earnest in February and to change the heads of the WTO's eight negotiating committees, hoping to find a better chemistry for advancing talks in Geneva, said people who attended the talks.
Mr. Perez del Castillo wasn't available to comment, but a commission official said: "Perez del Castillo is doing what needs to be done. He's seeing where people stand and is looking for gaps that must be closed to move talks forward."
Global trade talks have ground virtually to a halt since a September meeting of trade ministers in Mexico ended without an agreement. The EU has been one of the least enthusiastic WTO members about getting talks started again, saying it needed a period of "reflection" to reassess its own trade-negotiation strategy and whether the WTO needed to be overhauled. But some worry that Mr. Lamy is moving too slowly and should be doing more to help the WTO negotiations.
While Mr. Lamy wrestles with a debate within the EU, he also is preparing to square off against the U.S. over the FSC tax breaks, providing details of sanctions that the WTO has already authorized it to levy.
The commission plan, which must be approved by EU governments Friday, calls for imposing tariffs of an initial 5% on $4 billion (€3.48 billion) of U.S. exports to Europe. This rate would then rise by one percentage point a month to a maximum of 17% by March 2005, the official said.
Mr. Lamy said he wanted to send "a very clear message" to Washington that further delays in complying with the WTO ruling were "unacceptable."
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