WTO seen on verge of new trade deal
(Agencies)
Updated: 2004-07-31 22:47

The World Trade Organization on Saturday was on the verge of an agreement to get stalled global trade talks back on track after key poor and rich nations struck a hard-won deal to slash farm subsidies and open markets.

Following an all-night negotiating marathon, key members, including the United States, the European Union and Brazil, agreed on a package that included the eventual elimination of farm export subsidies, long a major developing country demand.

World Trade Organization Director General Supachai Panitchpakdi studies a document before an informal head of delegations meeting at the WTO's Geneva headquarters on July 30, 2004. [Reuters]

The chances of an overall deal rose when a core group also reached accord on wording for an agreement covering industrial goods trade.

Any deal would have to be signed off by the WTO's full 147-member body, which was not expected to meet before early evening at the WTO's headquarters in Geneva.

"Agriculture is not a real stumbling block anymore, the feeling is that it's done even if there are some loose ends," said Gregor Kreuzhuber, a spokesman for EU Agriculture Commissioner Franz Fischler.

Agreement on the sensitive issue of agriculture opened the way for a similar understanding in the other key areas of the Geneva talks, which aim to revive the WTO's troubled Doha Round of free trade negotiations.

A successful conclusion of the Doha round -- still some years away -- could inject some hundreds of billions of dollars into the world economy and lift over half a billion people out of poverty, according to the World Bank.

Fischler himself, who has been fiercely criticized by France, the biggest beneficiary of EU farm subsidies, for giving away too much, said the EU could "broadly accept" the farm deal.

"I think we can live with the package as it is," he told reporters at the WTO's headquarters.

A delegate from Mauritius, which has taken a leading part in the WTO talks on behalf of African nations, said that the so-called Group of 90 developing country alliance could also live with the text even if it did not get everything it wanted.

The Geneva talks also cover services and plans to harmonize customs' practices to curb corruption.

RISKS OF FAILURE

Failure would mean a virtual rerun of the collapse of world trade talks in Cancun, Mexico, last year, with the risk that further trade liberalization would be delayed for years.

But the atmosphere at WTO headquarters, where the trade body has been rushing to meet an end of July deadline, contrasted with the bitter mood in Cancun. Diplomats from North and South all said they were committed to finding compromises.

The EU, the United States and countries such as Japan and Switzerland, have set greater access to developing country markets for industrial goods as one of the conditions for agreeing to slash the subsidies they lavish on their farmers.

But the proposed text on farm trade made clear that the poorest countries would not have to contribute to the market opening in any of the areas, including services.

The route to a farm deal, which was expected to be put to the full membership later on Saturday, had been speeded on Thursday after the United States and African cotton producers overcame their differences in the handling of a crop which is often held up as a prime example of how rich nation subsidies keep the poor out of world markets.

The revised farm text, hammered out by some 15 countries, all representing a wider range of interests within world trade, soften demands on developing countries to open their farm markets by giving the poorer ones a virtual free hand in determining which products to continue to protect.

At the same time, it leaves vague the criteria under which rich nations, many of whom also have highly sensitive products, such as rice in Japan, will be able to maintain some high barriers to Third World produce.

And the United States was forced to accept further negotiations -- again at some future phase in the round -- on its demand for flexibility on how it treats some of its farm support programs that otherwise would be subject to tight restrictions.

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