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The G-8 Wraps With Developing Nations

Summit's last session includes China, India, Brazil, South Africa and Mexico to help resolve the trade deadlock with the industrial countries.

July 18, 2006|David Holley and James Gerstenzang | Times Staff Writers

STRELNA, Russia — World leaders meeting here sought on Monday to energize international trade talks intended to lower tariffs and make it easier for nations to sell their products in now protected markets.

The three-day summit of the Group of 8 leading industrialized nations concluded with a final session that also included leaders of five major developing countries: China, India, Brazil, Mexico and South Africa. That gave the opportunity for balanced discussion of the trade deadlock, as the needs of industries and agriculture in different regions of the world have brought a three-way split among the United States, the European Union and developing nations.

Key to progress is how much the U.S. government will cut its farm subsidies, how much the EU will lower tariffs on farm imports and how much developing countries will reduce barriers to industrial and service imports.

The most recent effort to complete the so-called Doha round of trade talks, begun five years ago in Qatar's capital, for which the talks were named, broke down two weeks ago. In a statement Sunday, leaders from the Group of 8 -- the U.S., Russia, Britain, Germany, France, Italy, Canada and Japan -- called for negotiators to try again.

They hope to achieve a breakthrough on the talks among World Trade Organization members within a month and wrap up a deal by year's end.

"This is a historic opportunity to generate economic growth, create potential for development and raise living standards across the world," they said. "We urge all parties to work with utmost urgency for conclusion of the round by the end of 2006, to strengthen the multilateral trading system and provide an important boost for the world's economy."

The G-8 leaders and their guests sought Monday to build political momentum to achieve those goals.

Speaking during a picture-taking session with President Luis Inacio Lula da Silva of Brazil, as rain squalls chilled this suburb of the northern Russian city of St. Petersburg, Bush said, "We're committed to a successful Doha round." Lula in turn saluted the G-8 decision to devote attention to the trade negotiations. "Now is the time for us to make a political decision," he said.

The negotiators "have done immense work," the Brazilian president said. "But now it seems to me that they don't have any hidden card in their pockets any more. Now we're the ones that have to take our cards from the pockets."

Later, some of the G-8 leaders indicated that the day's talks had shown signs of political will to break the deadlock.

"Before we had our lunch discussion I was somewhat pessimistic," British Prime Minister Tony Blair said. "I am less pessimistic now."

As the most recent efforts to overcome obstacles broke down in Geneva this month, the U.S. and the EU, two regions where farm interests exert strong political influence, were wrangling over an acceptable level of government support for farmers. Subsidies make it easier for agricultural interests to try to undercut foreign competitors by lowering prices.

The expanded gathering also issued a statement Monday condemning the terrorist bombings of commuter trains in Mumbai, India, on July 11. "We are united with India in our resolve to intensify efforts to fight terrorism, which constitutes a threat to each of our countries as well as to international peace and security," they said.

At a closing news conference, Russian President Vladimir V. Putin, the host, expressed satisfaction with the results of the gathering.

"All the goals we set ourselves have been achieved," he said. "Not a single issue arose which we failed to agree upon."

The G-8 leaders issued statements Sunday on the Mideast, the dominant discussion topic, trade and the official thrusts of the summit: energy security, education and infectious diseases. They also issued documents on counter-terrorism efforts, intellectual property rights, African development and high-level public corruption.

In the statement on energy security, Russia agreed to EU demands to support in principle transparent and open energy markets. But the document appeared to do little to resolve disagreements between the two sides.

The United States and the European Union have pressed Russia, a major exporter of oil and gas, to open its largely state-controlled energy sector to more foreign investment and market competition. Meanwhile, Russia has urged the EU to allow its firms to buy into European distribution networks. Aside from endorsing vague principles such as "market-based investment flows," the statement did little to clarify how this issue might be resolved.

As for expanding the use of nuclear energy and addressing climate change, it simply acknowledged that participants disagreed.

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