WTO states launch fresh bid to end deadlock in farm trade

1.00pm

GENEVA - World Trade Organisation (WTO) states have launched a fresh bid to end a deadlock in farm trade negotiations, with the European Union again under pressure to yield on export subsidies.

Going into the four days of talks, differences remain between the major trading blocks on all three pillars of the agricultural negotiations -- domestic support, export subsidies and market access.

However, they are particularly deep on market access, the degree to which both developing and developed countries must open up their domestic markets to the produce of other WTO states.

A breakthrough soon in agriculture is vital if the WTO's 146 members are to meet a self-set deadline for outline agreements covering both farm and industrial goods by the summer.

"We need to show by May that something has changed. If we do not, we may start to run out of time," said one European diplomat ahead of the talks.

The talks are the second round to be held since the WTO agreed earlier to try and put the troubled Doha Round of free trade negotiations, of which agriculture is a key component, back on track after they were all but derailed by the collapse of a ministerial conference last September.

The chairman of the farm talks, New Zealand's ambassador to the WTO Tim Groser, told delegates he sensed some progress was made on domestic support and export subsidies at the last meeting in early April and that he wanted negotiators to focus on import barriers this time.

After a brief meeting of all member states, the talks broke up into bilateral and plurilateral discussions between the various alliances and the whole membership will only come together again on Friday.

Leading farm goods exporters in the Cairns Group and the G20, led by Brazil, China and India, which share many members, reject the so-called "blended" formula approach to tariff-cutting favoured by the United States and the EU.

This aims to marry the system of gentle reductions used the last time world farm trade rules were re-negotiated, in the so-called Uruguay Round, on some import tariffs, with a more aggressive style of cutting for others.

However, the G20 and the exporters say that the approach is carefully tailored to ensure the EU can keep duties high on its most sensitive products, such as beef, dairy and sugar.

"It does not deliver the sort of (market) access we need. Perhaps we can get into identifying possible alternatives this week," Australia's ambassador David Spencer told Reuters.

While it may not be the subject of much direct negotiation this time, the issue of whether or not the EU will finally agree to set dates for ending all export subsidies, of which it is the biggest user, looms over the whole proceedings.

Brussels has said it is willing to discuss getting rid of export subsidies, which experts say are the most trade-distorting form of state aid, on products of "particular interest" to developing countries.

However, developing states and exporter groups reject this and insist that the EU must accept that the subsidies will go, even if the dates are left for a later phase of the negotiations.

"We have told them that if it does not come (eventually), then that is the end of all the negotiations. We can just pack it all in," said one diplomat from a G20 country.

Some diplomats said that the EU may give fresh hints this week that it is prepared to move, but others said that they expected nothing before ministers meet on the fringes of a gathering of the Organisation for Economic Co-operation and Development (OECD) in Paris in mid-May.

- REUTERS