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Analysis: Rich, Poor Countries' Rift Still Dogs World Trade Bargaining

STAFF | Agence France-Presse | July 27, 2004

Officials have warned that failure to secure a compromise by Friday could set back efforts to pry open multi-billion dollar agriculture markets, especially for poor countries, by years.

Rich and poor countries in the World Trade Organisation appeared to be as far apart as ever as the 147 member states began their final days of bargaining to salvage crucial trade talks.

About 30 ministers and senior officials, including India's Trade Minister Kamal Nath, US trade representative Robert Zoellick and European Union Trade Commissioner Pascal Lamy, held a flurry of bilateral meetings in Geneva on the sidelines of the WTO's ruling General Council.

Officials have warned that failure to secure a compromise by Friday could set back efforts to pry open multi-billion dollar agriculture markets, especially for poor countries, by years.

The warnings have been reiterated by WTO Director General Supachai Panitchpakdi since a draft compromise proposal laying out the issues for further trade negotiations was presented to trading nations on July 16.

But the framework has foundered, especially on agricultural subsidies and import tariffs.

WTO chief negotiators were preparing a new version to be presented on Wednesday, although it could be delayed until Thursday, WTO spokesman Keith Rockwell said.

This week's input from higher-level ministers appeared to be making little difference to the rift.

"We are creating knots that have to be untied later," Morocco's ambassador Omar Hilale said, adding that he had the impression the effort was moving backwards.

India's trade minister told journalists that the framework put forward by the WTO "doesn't fly," although Nath pointed out that all countries were negotiating hard to find common ground.

"There are difficulties aplenty especially on agriculture and non-agricultural market access," Rockwell said.

Chief agriculture negotiator Tim Groser met with key trade powers -- the EU, the United States, Brazil, India and Australia -- Tuesday, as he grappled with often-contradictory demands from different groups.

The draft compromise aims to overcome deadlock in the two-year-old Doha round of trade talks, which have been blocked since a WTO ministerial meeting collapsed in Cancun, Mexico last September, exposing a rift between rich and poor countries.

Representatives of the G-20 group of developing countries said the text needed to be turned into a looser but clear set of general principles to stand a chance of gaining consensus, although it would still mark a political step forward in the Doha round.

But they said they after a meeting here that would not seek an accord in Geneva at any price.

Argentina's foreign trade minister Martin Redrado told AFP: "We will not sacrifice the essence for the simple aim of reaching an agreement his week."

Nath explained earlier that India could not bargain a blanket increase in access to its markets in exchange for the elimination of farm export subsidies that developing countries had demanded from rich countries.

Tariff cuts would amount to selling off the livelihoods of 600 million Indians who rely on small-scale subsistence farming, the minister said.

Although there had been progress since Cancun, Nath said there was a fundamental difference in approach between the European Union and the United States on one hand, and India on the other, on agriculture.

"Their constituency is mercantilist, where we have a constituency that is subsistence or survival," he said, adding that each side had "valid concerns" that needed to be harmonised.

The European Union has been seeking "important" changes amid fears that the compromise did not provide enough returns for European farmers.

The EU says it is willing to consider the elimination of 3.3 billion euros (3.98 billion dollars) in export subsidies paid to European farmers a year provided Washington breaks down the system export credits received by their US counterparts.

The July 16 WTO draft advocates negotiating the simple elimination of export subsidies in agriculture, which developing countries had demanded.

The proposal would only restrict farm export credits, but cut tariff barriers and pare down the agenda for non-agricultural talks.

The text also advocates exemptions for the world's poorest countries to retain a degree of protection for their economies.

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