WTO members concluded three days of talks without healing a rift over agricultural tariffs and subsidies which threatens efforts to liberalize global trade.
"There was a huge divergence of views" on agricultural trade, said Japan's foreign minister, Yoriko Kawaguchi, after the meeting in Tokyo ended.
Twenty-two WTO members earlier rejected the Geneva-based organization's latest proposal to lower import tariffs on agricultural products and cut farm subsidies as a basis for fresh talks because the European Commission, Japan and other members objected. But the US side said the proposal doesn't go far enough.
They instead agreed the proposal from Stuart Harbinson, chairman of the WTO agriculture negotiating committee, would be a "catalyst" for further discussion.
"Japan needs to face the reality," US Trade Representative Robert Zoellick said.
Its farmers make up 2 percent of the economy and 1.8 percent of the population, he said.
WTO members have until the end of next month to decide on a framework for an accord on agricultural trade. A wider agreement on lowering trade barriers to products ranging from industrial equipment to financial services worth an estimated US$700 billion over a decade must be concluded by Jan. 2005. All 145 WTO members meet in Cancun, Mexico in September.
Harbinson has to draft a revised proposal by March that satisfies both food exporters such as Australia and Brazil, who want more access to overseas markets in return for easing duties on other products, and the EU and Japan that want to protect their farmers from cheaper foreign produce.
"The US stands with exporting countries. I think we are going to face a few bumps on the road [to Cancun] because not all major countries are ready to move on agriculure," Zoellick said.
The rejected draft called for a 50 percent cut in export subsidies within five years of a WTO agreement, and their elimination within nine years. It also proposed a cut of as much as 60 percent in all forms of subsidies the WTO allows to farmers and a 25 percent to 60 percent cut in import tariffs. Japan imposes a 490 percent levy on imported rice.
The Tokyo meeting also failed to reach agreement on allowing poor countries access to cheap drugs and WTO members have still to find a way to resolve the issue.
Delegates exchanged views regarding US opposition to allowing poorer countries to import generic versions of lifesaving medicines in violation of patents. The US says that under current proposals, there would be no way to prevent the cheaper drugs from being re-sold for profit.
The US blocked an accord in December on the grounds that it might enable generic drugmakers to ignore patents held by companies including Pfizer Inc and Merch & Co on drugs outside public-health crises, such as those to treat obesity or cancer.
Representatives from Australia, Brazil, Canada, Chile, Costa Rica, Egypt, the EU, Hong Kong, India, Indonesia, Japan, Kenya, South Korea, Lesotho, Malaysia, Mexico, New Zealand, Nigeria, Senegal, Singapore, Switzerland and the US attended the gathering.
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