WORLD TRADE:EUROPEAN LEADERS at this week's EU Council expressed concern that gloom on financial markets must not lead to protectionism or prevent progress in trade negotiations.
"There is a risk that, with the financial crisis, voices will be raised saying globalisation is bad," according to David O'Sullivan, the Irish man who is director general for trade at the EU Commission.
"The reflex is to be more protectionist. The worst thing we could do would be to combine the financial crisis with a trade crisis."
Mr O'Sullivan said he believed it was possible to reach agreement this year in the seven-year-old Doha round of international trade negotiations. There would be a "window of opportunity" between mid-November and mid-December after the Indian elections.
"Our view is that it's very important to inject new confidence and good news, to demonstrate that the world trading system has life in it. The World Trade Organisation is the only place where the new world order is at work - where the EU, US, China, India and Brazil sit around a table.
"If we can't make it work for trade how can we make it work for the global economic crisis, for climate change or other global governance issues?"
Last July the WTO came "tantalisingly close" to concluding the Doha round. "We were just a few centimetres from the line," Mr O'Sullivan said. The accord came unstuck because of a demand by developing countries for "special safeguard mechanisms".
The EU had little interest in the issue but "it was a major source of tension with the US, which is still exporting bulk commodities", Mr O'Sullivan added.
The Doha round has focused on agriculture, which was previously excluded from GATT, the General Agreement on Tariffs and Trade.
Mr O'Sullivan is at least the third Irish man to play an important role in trade negotiations. Peter Sutherland presided over the transition between GATT and the WTO and Garret FitzGerald brokered the 1973 Lome Convention.
The Irish Farmers Association has demanded that the Government veto any deal it deems damaging to Irish agricultural interests. "It would be a very heavy decision if you have a whole global agreement hanging on it," Mr O'Sullivan said. "It would be a very, very serious step."
The European Commission believed it has "succeeded in negotiating a very good outcome for Irish agriculture", he added.
"People are clamouring for very good access to EU markets. We have obtained that for sensitive products such as beef; you do not have to take the full tariff cut.
"The tariff cut for beef would not be 70 per cent, as is often misstated, but about 20 per cent. And there is a ceiling . . . We've had to pay a price [ in WTO negotiations] in Geneva for securing the defence of agriculture. We have been a lot less aggressive in asking for concessions on goods and services.
"When I hear farmers tell me: 'you've sacrificed our interests for goods and services', I say it's the other way around."
The gains of a WTO deal would be substantial. "The wealth created by 1 per cent growth in world trade is several multiples of the EU's entire overseas development aid," Mr O'Sullivan said.
A deal completed in December would enter into force in January 2010. It would lock in the discipline in agricultural spending in the EU's 2003 reform of the Common Agricultural Policy, but it would also force the US to substantially review the Farm Bill, which Mr O'Sullivan describes as "a licence to subsidise American agriculture".
He said the EU was the world's biggest trading bloc. "Trade is the lifeblood of the EU economy . . . the only exclusive European competence that is managed by the commission." He added: "We want to continue to use trade as the lever of our prosperity in the 21st century. That means getting out in the global market and competing."
