Officials in Europe rejected US calls for an end to farm export subsidies within a strict deadline.
Already embroiled with the US in a dispute over steel tariffs, the European Commission, which negotiates international trade issues on behalf of the 15 EU countries, said it was too soon to talk of deadlines.
On Tuesday, the US, with the EU clearly in mind, urged the WTO to set a five-year deadline for ending agricultural export subsidies in upcoming talks on farm reform.
Gregor Kreuzhuber, spokesman for EU Farm Commissioner Franz Fischler, said the Commission's stance had not changed since the deal reached at Doha, Qatar last year to launch a new WTO round on further global trade liberalization.
"We have been extremely clear about our position. We are prepared to substantially reduce our export subsidies with a view to phasing them out -- the famous Doha phrase -- only if other trade distorting measures are treated equally," he said.
"The US said very little about this," he said.
Speaking in Geneva, US chief negotiator Allen Johnson said Washington fully supported further farm reform talks, despite the recent US farm bill that boosted agricultural subsidies and sparked worldwide condemnation.
"Our proposal is to eliminate export subsidies in five years," he told reporters after a two-day WTO meeting.
The six-year farm bill increases domestic subsidies to US farmers by billions of dollars, but its critics, including the EU, have said it will distort world markets. The legislation effectively institutionalizes payments used since 1998 to shield farmers from low prices.
The EU maintains that Washington's system of export credits, short-term loans which provide a financial guarantee to exporters should they not be paid for their goods, give it an unfair competitive advantage on world agricultural markets and therefore should be treated as exports subsidies.
"Our system is completely transparent, we publish details of our export subsidies. We want to see non-transparent forms such as export credits also disciplined," Kreuzhuber said.
Gold and silver fell sharply during the afternoon's trade, with both metals yanked off the previous day's highs as investors, rattled by a recovery in the US dollar and US stocks, rushed to cash in on the precious metals.
Gold slipped to close in London at US$321.30/321.80 an ounce, 1.8 percent down on Tuesday's New York close of US$327.40/321.80 and just over US$4 off its European opening levels of US$325.40/325.50.
Silver likewise skidded below US$5 an ounce to hit US$4.92/4.94 at the close against US$5.10/5.12 at the previous close in New York.
Gold had rallied to highs of US$331.40 in New York on Tuesday to reach its firmest point since October 1999. But as trade began to wind down in Europe and the dollar found its legs against major currencies, investors in New York scurried to sell both metals.
A stronger dollar makes bullion more expensive for potential investors outside the US.
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