July 17, 2006

G8 give trade a push amid strains over MidEast

By Caren Bohan and David Clarke

ST PETERSBURG, Russia (Reuters) - Group of Eight leaders on
Monday inched toward a breakthrough over global trade on
Monday, Britain said, at the end of a big-power summit strained
by divisions over the Middle East crisis.

After G8 leaders met key developing countries at the summit
British Prime Minister Tony Blair said there were signs of
willingness to make the compromises needed to rescue a troubled
world trade pact.

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

The leaders of the United States, Germany, Brazil, India
and the European Commission "spoke very strongly about the
necessary flexibility being given to our negotiators" to rescue
the Doha round, whose goal is to lift millions from poverty.

All sides involved will have to abandon entrenched
positions on farm subsidies, agricultural tariffs and market
access for goods and services and the basis for Blair's
optimism was not immediately clear.

On Sunday, G8 leaders set a one-month deadline to map out a
framework to close the five-year-old Doha trade round.

The key developing world countries, Brazil, India and
China, were representing the interests of the world's poorest
countries, who are supposed to be the principal beneficiaries
of the Doha round. Talks hit an impasse last month.


If true, progress on global trade would be one of the few
clearcut achievements from the St Petersburg summit, which was
overshadowed by violence in the Middle East.

The United States squabbled openly with G8 partner France
over interpretation of a joint summit declaration that urged
Israel to be restrained in its offensive in Lebanon but told
Hizbollah to make the first moves to end the crisis.

France's Jacques Chirac, who has differed already with
Washington by criticising Israeli action as excessive, said
late on Sunday that the G8 was basically calling for a

"It is clear that the G8 is calling for a ceasefire. I can
tell you that the whole of the G8 has called for a ceasefire in
Gaza and Lebanon," he told reporters.

But Washington, Israel's big backer, flatly contradicted
him. "There was no push for a ceasefire this weekend,"
UnderSecretary of State for political affairs Nicholas Burns
told reporters.

United Nations Secretary-General Kofi Annan said Security
Council members would on Monday start hammering out a detailed
agreement on deploying a multilateral security force to
Lebanon, following up a proposal in the weekend G8 statement.

After talks with Blair, Annan said he would push ahead with
the plan as a matter of urgency.

The initial reaction from Israel, however, was cool. "I
don't think we're at that stage yet. We're at the stage where
we want to be sure that Hizbollah is not deployed at our
northern border," Israeli government spokeswoman Miri Eisin


Key sticking points are U.S. farm subsidies and the extent
to which the European Union cuts tariffs on farm goods and
developing countries open their markets to industrial goods and

The United States said it was sending its trade negotiator
straight to Geneva, home of the WTO, to get talks moving fast.
The six key trade ministers would meet later in the day.

President Bush and Brazilian President Luiz Inacio Lula da
Silva urged a redoubling of efforts.

"I am convinced that now is the time for us to make a
political decision," the Brazilian leader said, adding that
negotiators "don't have any hidden cards in their pockets" so
it was critical for leaders to get involved.

Assistance to Africa, put at the top of last year's summit
by Britain's Blair but initially ignored by Russia for this
year's meeting, was also on the agenda for the session to be
attended by Annan and the African Union.

Annan said there had been progress since the 2005 G8 summit
in Gleneagles, Scotland, "but there is much more to be done."

Summit host Vladimir Putin, under fire from the U.S.
leadership and others in the West and Russia for his record on
democracy, pledged to his partners that he would not change the
constitution to give himself a third term beyond 2008.

Putin himself brought up the issue of democracy over dinner
on Sunday, initiating "a frank but friendly discussion," a G8
diplomat said.

(Additional reporting by Jeff Mason)