World leaders want deal in trade talks

L’AQUILA, Italy — Leaders of rich and developing nations want to finally seal a long-delayed world trade deal next year and head off trade wars that could hit world economies as they struggle to emerge from recession, according to a draft of a joint declaration obtained by The Associated Press.

Completing the so-called Doha round of talks has risen up the agenda due to fears that the economic crisis will lead to an upsurge in protectionist policies like the ones that helped cause the Great Depression of the 1930s.

“We reaffirm our commitment to maintain and promote open markets and reject all protectionist measures in trade and investment,” according to a draft of the joint statement signed by 17 nations, including the Group of Eight industrialized countries and five key emerging market economies.

The global trade talks, which were initially to conclude in 2004, have been beset by difficulties and at a standstill for months. A deal would cut goods tariffs and subsidies around the world.

The leaders asked trade ministers to meet prior to the Group of 20 meeting of developing and rich countries in September in Pittsburgh, according to the draft. The final document is to be released later in the day.

Raising barriers to imports was an important factor that contributed to the world economic crisis of the 1930s. Governments, including the United States with its Smoot-Hawley Tariff Act of 1930, sought to protect domestic businesses and farmers by blocking imports. Other countries did the same and world trade withered.

A global trade war hasn’t broken out yet, but the World Trade Organization has warned of increasing incidence of protectionist practices.

The so-called G-5 developing countries issued a separate statement on Wednesday expressing the importance of concluding the talks.

“We are concerned with the present state of the world economy, which submits the developing countries to an inordinate burden resulting from a crisis they did not initiate,” the G-5 said. Concluding the Doha round would aid “the restoration of confidence in the world markets and inhibit emerging protectionist trends,” the G-5 said.

The Group of Eight industrialized nations of Canada, Britain, France, Germany, Italy, Japan, Russia and the United States on Thursday opened their annual summit to G-5 members Brazil, China, India, Mexico and South Africa, as well as Egypt. Also signing off on the trade goals are the leaders of Australia, Indonesia and South Korea.

The so-called Group of Five, making their fifth straight appearance at the annual summit, albeit as guests, will discuss climate change, development aid, global economic growth and international trade with their Group of Eight counterparts — all topics touched on by G-8 leaders meeting on their own Wednesday.

In a report released last week, WTO Director-General Pascal Lamy said there has been some “further slippage” toward protectionism, citing 83 new trade rules that could be considered restrictive.

“Overall protectionist measures have been contained, and WTO rules have been instrumental in restraining government action against imports,” the report said.

Still, Lamy said countries were failing to reverse protectionist policies put in place since the collapse in financial markets late last year, contrary to pledges from the world’s leading countries.

Lamy also warned that trade would decrease by 10 percent this year, down from the 9 percent contraction earlier predicted. He said rich countries exports would likely slip 14 percent, with that of developing countries falling by 7 percent.

The G8 has pledged in previous years to wrap up the long-struggling round, without success. High-level WTO negotiations failed shortly after G8 summits in St. Petersburg, Russia, in 2006, Heiligendamm, Germany, in 2007, and Toyako, Japan, in 2008.

India will host a meeting of about 30 trade negotiators from the United States, European Union and other commercial powers in early September, with the hope of making the first substantial progress on cutting goods tariffs and limiting farm subsidies since Obama took office in January.

The ministers will report their progress to the G20 meeting in Pittsburgh, said Ujal Singh Bhatia, India’s ambassador to the World Trade Organization.

Associated Press writers Nicole Winfield and Alessandra Rizzo contributed to this report.