No headway at Interim Doha round
Geneva: Ministers trying to come to an interim deal in the Doha global trade round saw no hope of an agreement this weekend as sign key players did not seem ready to make the required concessions. The European Union went further than before in its willingness to make bigger cuts in farm tariffs, provided the US improved its offer to reduce domestic farm subsidies and larger developing countries agreed to lower tariffs on industrial goods.

The Group of 20 developing countries, led by Brazil, proposed a 54 per cent average cut in farm tariffs by rich nations, roughly halfway between the EU and US proposals.

However, the Bush administration, under strong political pressure from the US Congress, did not move on farm subsidies.

A senior trade official from an industrialised country said, "Unless the US moves on domestic support there will not be a deal."

Brazil's foreign minister rejected the "three times 20" overall bargain suggested by Pascal Lamy, director-general of the World Trade Organisation that would link the G20 proposal on farm tariffs to a $20bn ceiling on US farm subsidies and a formula coefficient of 20 (roughly speaking, a maximum tariff of 20) for imports of industrial goods into developing countries.
Back to News Review index page  

US Fed hikes PLR by 25 points
The US Federal Reserve has hiked interest rates by 25 points to 5.25 percent which is the highest point in more than five years. Indications coming from the fed that this may be the final rate gain for some time to come the Dow Jones industrial average soared 217.24 points to 11,190.80, its biggest single-day jump in more than three years.

US Fed chairman Ben Bernanke and other Fed policymakers didn't rule out another bump in rates but seemed hopeful that a slowing economy would lessen pressure on prices. The Fed's goal is to raise interest rates enough to keep inflation in check but not so much as to hurt economic activity.

In response, commercial banks raised their prime lending rate - for certain credit cards, home equity lines of credit and other loans - by a corresponding amount, to 8.25 percent. This led to the funds rate and the prime rate being at their highest points in more than five years.

Some economists predicted the Fed might boost rates again in August or maybe again in September, then stop for a while to assess how the economy is doing. Some analysts said they were now far less certain another rate increase would come.
Back to News Review index page