World economy fears prompt trade deal push

By Jonathan Lynn - Analysis

DAVOS, Switzerland (Reuters) - Fears about the world economy seem to have convinced trade ministers to make a final push to clinch a deal this year in the long-running Doha round to open up global trade.

As aftershocks of the subprime debacle in the United States ripple through financial markets and cloud the business outlook, trade ministers are aware of the fresh blow to confidence -- and growth -- that failure to deliver a Doha deal could entail.

Add to that the likelihood that it will be hard to get a deal through Congress once a new U.S. administration takes office in 2009, and the race is on to complete the round this year -- with ministers eyeing a broad deal in March or April.

"With the gloomy economic outlook in the developed countries the conclusion of this round will be a shot in the arm for the global economy," said Indian Trade Minister Kamal Nath at the World Economic Forum in the Swiss ski resort of Davos.

Nath and other ministers emerged from a lunch with the head of the World Trade Organisation (WTO), Pascal Lamy, on the sidelines of the forum on Saturday talking of a new resolve and momentum in the talks, launched in the Qatari capital in 2001 to boost the world economy and help poor countries.

U.S. Trade Representative Susan Schwab said the United States, like other key players, was committed to a deal in 2008, although some countries were still holding back.

"Hopefully they will become more enthusiastic when they see the tremendous potential for a vote of confidence in the global economy that a successful global round would bring -- and the very real dangers and lost opportunity that a failed Doha round would mean for the global economy," she said.

Some countries have argued that President George W. Bush's administration would not be able to deliver a deal in its last, and potentially lame-duck, year.