Paris, April 29 (Bloomberg) -- The U.S., Japan and other industrialized nations must find ways to revive global trade talks that are stalling because of disputes over the Iraq war and farm aid, an International Chamber of Commerce official said. Lack of progress by the 30 trade ministers at the Organization for Economic Cooperation and Development to bridge differences when they meet this week will reinforce concerns the current round of World Trade Organization talks won't reduce trade barriers. The OECD's two-day annual meeting starts today. ``The world economy badly needs a shot in the arm and this would help business and consumer confidence,'' said Stefano Bertasi, deputy director of policy at the Paris-based International Chamber of Commerce, which represents thousands of companies in more than 130 countries. ``Now that the war is over, it's time for countries to patch up their differences and coalesce around the WTO.''
The WTO last week forecast that sluggish economies, the war and the respiratory virus outbreak in Asia mean trade in products will expand less than 3 percent this year. Trade growth will lag the average 6 percent expansion recorded during the 1990's. Issues raised at the meeting may include concerns American companies are monopolizing the rebuilding of Iraq, access to cheaper medicines for poor nations and the more than $300 billion spent annually by rich nations on their farmers. Wealthy nations' trade barriers, including farm aid, are undermining WTO efforts to agree on cuts to industrial tariffs and improve access to financial-services markets, the World Bank said this month. Compromises The World Bank estimates a WTO agreement, scheduled by Jan. 1, 2005, may add $800 billion a year to the global economy. Trade ministers ``now have to decide whether to start making compromises or put them off again,'' said Peter Holmes, a trade economist at the University of Sussex in England. ``They're certainly going to try and avoid it looking like the thing is doomed.'' Some of the harshest critics on farm spending in the U.S. and European Union, including India, South Africa and Brazil -- which is challenging the U.S. at the WTO to justify the $3.9 billion it spends yearly to help American cotton farmers -- have been invited to the Paris meeting. Developing countries and food exporters such as Australia, Canada and Brazil want better access to the three biggest economies in return for lowering barriers to industrial goods, financial and energy services at the WTO talks. ``This is a very sensitive time in the world economy and in these negotiations,'' said Robert Zoellick, U.S. trade representative, in an e-mailed statement. The WTO talks begun in 2001 ``represent a once-in-a-generation opportunity.''
`Blame Game'
The U.S. accuses the EU of stalling efforts to slash farm subsidies and U.S. congressional pressure is building for the U.S. to challenge the EU's ban on gene-altered foods, Commerce Secretary Grant Aldonas said today. ``Let's move away from the blame game and start looking at constructive solutions,'' said Arancha Gonzalez, a spokeswoman for EU Trade Commissioner Pascal Lamy. The full WTO is scheduled to meet in September. Failure at that meeting to make progress on issues such as cutting industrial tariffs and opening financial services threatens the 2005 deadline for the round of talks, analysts have said. //www.bloomberg.com