Executives step up pressure for Doha trade deal

By Alan Beattie in London
Published: March 1 2007 02:00

Letters from two coalitions of chief executives urging completion of the Doha round in today's Financial Times have a familiar ring. Unlike previous broadsides, there might be a sustained follow-up.

Assorted groups of executives and business lobbies have made similar calls in recent years for progress in manufacturing and services liberalisation. But for much of that time, negotiators including Peter Mandelson, European Union trade commissioner, have complained that, with the exception of some service sector companies, there has been a lack of focused day-to-day business pressure for a deal. Such lobbying helped bring the Uruguay round of trade talks to an end in 1994.

Peter Power, spokesman for Mr Mandelson, said yesterday: "We welcome the interest shown by industry, which has become much more visible in recent months."

European officials place the turning point around the beginning of the year. In January, Medef, the French employers' confederation, said EU states should give Mr Mandelson freedom to negotiate, defying objections from Paris that he had exceeded his mandate.

US officials say they were sought out by several chief executives at the World Economic Forum in Davos to press home the importance of Doha.

It remains to be seen how much businesses will continue to engage once the outline of a draft deal emerges. Detailed knowledge and commitment to multilateral trade issues among senior executives often appears elusive.

Peter Brabeck-Letmathe, chief executive of Nestlé, the food company, appeared last November at Chatham House, the London think-tank, to talk about business in Africa.

Mr Brabeck-Letmathe, whose company boasts extensive operations in Africa, said there was an increasing recognition that trade was one of the most important ways to reduce poverty. "We have argued for a very long time, for example, that there is no justification. . . that African farmers or small businesses, many producing to high standards and with low prices, should not have free access to the European and North American markets."

Most African countries can export tax-free to the EU almost anything that they have substantially made or grown under one of several special "preference" schemes, as long as they meet tough hygiene rules.

Switzerland has similar programmes. For example, contrary to a commonly held fallacy (repeated by Tony Blair, prime minister, at Davos in January), the cocoa and coffee bean growers of Ghana, Ivory Coast, Uganda, Ethiopia and Rwanda would face no tariffs if they exported finished chocolate or fully processed coffee into the EU.

Challenged to name examples of products and countries kept out of European markets, Mr Brabeck-Letmathe could not do so, though he claimed "we still have enormous, enormous barriers" against African exports.

Financial Times