World Trade Organisation plans to eliminate tariffs across a broad swathe of industrial goods – leather and footwear included - suffered a setback yesterday after three days of preliminary talks in Geneva ended in deadlock.

Undertaken as part of the ‘Doha Round’ which is due to conclude in January 2005, the talks were aimed at establishing a blueprint for more detailed discussions in mid-September.  However, ministers found themselves unable to agree on a range of issues, with the result that a fresh round preliminary talks will now have to take place in July.

Ironically, the strongest opposition to the proposed cuts was from the 49 least developed countries (LDCs). Though the cuts will make their products more competitive in export markets, they were worried that they will be worse off in the long run, as they will have to give up many of the concessions they currently enjoy.  For their part, many of the richer countries wanted the cuts to go deeper, with aim of doing away with the tariffs altogether.

Under the Doha plan, developed countries will be obliged to eliminate tariffs across seven categories of industrial goods within 12 months of the implementation date of January 1 2005.  Developing countries will have three years to do the same. The categories are leather, leather goods and footwear, electronics and electrical goods, fish and fish products, motor vehicle parts, precious stones, metals, textile and clothing.

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