US experts call for end to

US experts call for end to 'old idea' of trade rounds

By Krishna Guha in Washington

Published: April 21 2007 03:00 | Last updated: April 21 2007 03:00

Nations willing to promote free trade should abandon the old idea of global trade rounds and negotiate deals among a coalition of like-minded states, an influential panel of US experts urged yesterday.

The Atlantic Council of the US also called for a joint US-European Union effort to restructure the entire international economic architecture, including the governance and structure of the G7, the International Monetary Fund, World Bank and International Energy Agency.

The council, which is chaired by two former US commerce undersecretaries, said the struggle to complete the Doha round showed that it was no longer possible to make meaningful progress in a global negotiating system that operated through consensus. It said economies willing to offer large tariff and subsidy cuts need to be able to deal with the "free rider" problem by not extending the same terms to everyone regardless of whether they made equally big concessions - the so-called MFN principle.

A coalition of pro-free trade states should be able to exclude non-participants from taking advantage of tariff cuts in specific product lines, though not from sectoral agreements.

Stuart Eizenstat, a former undersecretary of commerce in the Clinton administration, said this proposal would be compatible with World Trade Organisation rules and the coalition of the willing would agree to use the existing WTO dispute settlement mechanism.

Mr Eizenstat said whether the current Doha trade round yielded an agreement or not, it should be the last of its kind. "The world is moving too fast for this kind of consensus-driven, five, six, seven, eight-year rounds."

Grant Aldonas, a former undersecretary of commerce in the current administration, said he did expect a Doha agreement, but that it would be a very modest one. "I do not think that will sell in the US and I do not think it will sell in Europe," he said.

The council called for the US and EU to lead a new Bretton Woods-style conference to restructure the international economic architecture. Mr Eizenstat warned that unless they did so and offered to give increased power and representation to rising economies such as China, global economic governance would fragment.