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Molesworth & Featherston (Weekend) – 18 Nov. 2005

Molesworth & Featherston - Weekend Update edition


Business and Political News
18 November 2005
molesworthandfeatherston.co.nz

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World Trade
Dead as a Doha

The outlook for a successful Doha round in December looks more bleak than ever as Apec leaders gather this weekend. Crucial talks last week were hyped in advance as the ‘do-ordie’ opportunity for the Doha talks. They flopped. Now negotiators are reduced to calculating how far to push at Hong Kong in December. Their choice is to continue to try for a breakthrough, with the prospect of flaming out in December; or to use the Hong Kong meeting to lay groundwork for more talks in the Northern spring, and risk losing credibility and creating a sense of Failure. The Doha round began in 2001 with the aim of reducing barriers to world trade. The talks broke down in 2003 at Cancun when poor countries got tired of rich nations’ intransigence over agricultural barriers.

Rhetoric coming out of Apec has been strident towards the EU and there have been conspicuous attempts to isolate France. It looks like no one is softening the ground for a compromise to be reached next month. So there won’t be a December deal. But nor have things got so bad yet that hope of a breakthrough is forever lost. The signs suggest, though, Doha is going down the gurgler sooner or later.

France has been a main focus of pressure from the US and UK. That’s not because France alone is holding out to retain the advantages it believes it gets from EU subsidies and tariff protection, but because it is (a) the most powerful and obstinate opponent of liberalisation, and (b) France is deadlocked with the US, and especially the UK, on a range of other matters - some related, some not -- and the larger game is to put Doha on the table to be (quietly) negotiated alongside other issues.

The EU has offered some cuts to tariffs and there is mystification that the inch it is offering is not being taken by developing countries as better than nothing. But poor countries think the EU offer is close to nothing - even the US offer would destroy most of the gains to poor countries of free trade in agriculture, according to a World Bank report. The offered tariff cuts of up to ninety percent - sixty percent on those that most distort world trade).

MEDIA

TVNZ is under heavy from independent producers, wondering why it’s switching charter funding to commercial programmes that would be made anyway. Page 2.

ADDRESS IN REPLY

Don Brash highlights tax, the RMA energy and transport in his first major post-election go in the House. Page 3.

JOB CUTS

There is pressure on the government over Air NZ’s plans to cut engineering jobs and NZ post is to cut hundreds more. Pages 3-4.

GERMANY

The German elections, held the day after ours, produced a tax raising, super-slashing, labour-law loosening coalition of left and right. Page 4.

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