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Talks deadlocked over farm subsidy

WTO ministers look at a new compromise draft as meet enters make-or-break phase

Star Desk
World Trade Organisation ministers stared at an end-of-Sunday deadline, as the global trade talks at Cancun entered the make-or-break phase with rich and poor sides deadlocked over the issue of farm subsidies.
According to reports from Reuters, AFP and BBC News Online, a new draft text of the final declaration wrapping up positions on all issues is being handed to delegations at 2:00am Bangladesh time.
The draft aims to reconcile the United States and Europe on the one side and developing nations on the other.
The Group of 21 including India, China and Brazil wants a sharp cut in aid for farmers in rich nations, which is hurting their economies.
As 2,000 anti-capitalism protesters marched toward the heavily guarded World Trade Organisation meeting, ministers started to make concessions particularly on agriculture, which holds the key to the overall success of the talks.
"Our sense is that things are moving in the right direction in terms of an attitude favourable to negotiating," Reuters quoted U.S. Deputy Trade Representative Peter Allgeier as saying.
After three days of posturing and proclaiming their positions, member states are now down to the tough task of making decisions.
Meanwhile, things took a dramatic turn when a group of 90 African, Asian and other poor nations formed a block on Friday to press their demands on rich nations for wide concessions on farm reform. They also announced solidarity with the G21 in order to press their demands on rich nations for wide concessions on farm reforms.
The alliance came days after a more powerful group of 21 developing nations went on the offensive against the European Union and the United States at the summit talks in the Mexican resort town.
Though new alliance has 90 out of the 146 WTO nations under its command, their share of world trade is small.
Like the group of 21, the demand of the alliance is to see more efforts from rich nations to cut their tariff than the poor countries. Their stand is against the launch of new rules on investment and competition in the world trade. They are worried new rules on customs procedures also being considered would impose too great burdens on them.
On the ceremonial side, Cambodia and Nepal signed their membership packages a day after ministers agreed them and the two new members will formally join the WTO 30 days after they have ratified the agreements and informed the WTO.
This Mexican beach resort, which is hosting the five-day conference of ministers, was bracing for more street disturbances as anti-capitalist protesters vowed to make a final bid to disrupt the gathering that ends on Sunday.
Farmers, indigenous people, students and other anti-capitalist militants from around the world had earlier converged at various points in the city.
Dozens of young anarchists, known as the Black Bloc, packed rocks and other projectiles in huge garbage cans they made preparations for the march.
Ministers are struggling to find enough common ground to revive hopes of concluding a new global trade pact by their self-imposed deadline at the end of 2004.
A deal to lower barriers to business could add more than $500 billion a year to global incomes by 2015, lifting 144 million people out of poverty, the World Bank estimates.
On Friday, Chairperson and Mexican Foreign Minister Luis Ernesto Derbez opened informal heads of delegation meeting, stressing that these meetings are the core of the negotiations. All the facilitators had held consultations the previous day, he said, also stressing that ultimately decisions can only be taken by the full membership.
He said the ministers are now at the midpoint of the conference and that much good work had been done. Signs of progress are emerging, but a number of difficult issues remain where governments were still far apart, he said.
Ministers need to work together urgently to find solutions that all governments can live with. No text could ever fully satisfy all the objectives of all WTO members -- this is the nature of compromise, he said.
Derbez stressed that the Cancun ministerial conference is not launching or concluding a round, but rather providing the necessary framework and political guidance to allow Geneva negotiators to continue their work towards completion of the round by January 1, 2005.
The chairperson is scheduled to convene another heads of delegation meeting later on Saturday where he will distribute reports on consultations of the facilitators. He will then postpone the meeting in order to allow the ministers to prepare themselves. Later on, Derbez and the WTO director general will conduct the consultations.
But ministers remain wide apart on many issues, particularly agriculture, with developing countries demanding that the United States and the European Union slash the huge subsidies they pay their farmers and which, the poorer nations say, limit their access to world markets and perpetuate poverty.
"I hope that Cancun turns out as an important turning point because this is an opportunity for developing countries to leave the imprint of their stance on the WTO," said India's trade minister Arun Jaitley.
"If they miss this opportunity, the next will not come for decades," he told a news conference.
Developed countries have also said that failure in Cancun could condemn the trade round to limbo with a host of competing political concerns -- US presidential elections next year and the entry of 10 new members into the European Union -- leaving little time to talk trade.
India's Finance Minister Jaswant Singh reportedly said yesterday that New Delhi would not reduce subsidies earmarked for the farming sector as food security and welfare were important to the country.
"For India, agriculture is not a mere economic activity but a way of life. Our culture is linked to agriculture. We want subsidies to come down but at the same time ensuring food security is important," Singh was quoted as saying on the state-run Doordarshan television channel by the Press Trust of India (PTI) news agency.
"If someone asks us to stop giving subsidies to agriculture, we will not listen to him," Singh said.
A Reuters report says Brazil expected world trade talks to produce a modest, general accord on agriculture that set the agenda for further talks but did not target the subsidy cuts developing nations are after.
Brazil, a leader of the G21 developing countries, said the agricultural accord due to be issued at the conference would not define future trade rules.
"There will be an accord, but it won't be an accord that defines commercial rules, it will be one that defines the kind of negotiations to be put in place and the issues that will continue to be discussed," Brazilian Agriculture Minister Roberto Rodrigues said on a conference call from Cancun.