Top trade officials from the US and the EU met privately to discuss farm trade disagreements that increasingly threaten to derail the current round of WTO negotiations.
``What everybody wants to know,'' wondered Canadian Agriculture Minister Lyle Vanclief, ``is what are they talking about?''
EU Trade Commissioner Pascal Lamy, EU Agriculture Commissioner Franz Fischler and U.S. Trade Representative Robert Zoellick were among ministers from 25 countries at a three-day informal gathering in Montreal that began Monday. It is intended to prepare the ground for a meeting of all 146 WTO members in Cancun, Mexico, in September.
That meeting is a vital staging post in trade-opening negotiations that are supposed to create a global treaty by the end of next year. Wide differences over agriculture are the biggest stumbling block to success in Cancun.
Although all WTO decisions must be taken by consensus of all members, the two major trading powers say their private talks are crucial to breaking the stalemate over agriculture.
"It is not enough to say OK, we bulldoze all the other 144 members. But I think it would give a very important impetus if Europe and the US would narrow down their differences," EU spokesman Gregor Kreuzhuber said.
"We realize that anything that we reach agreement on ourselves has to be something that is going to be acceptable to the broad membership of this organization," said Deputy US Trade Representative Peter Allgeier.
At the start of the negotiations in Doha, Qatar, in November 2001, WTO members agreed in principle to reduce barriers to agricultural trade. What they still can't agree on is the details.
Taxpayers in rich countries spend about US$300 billion each year supporting their farmers. Developing countries complain that these policies hurt them by flooding markets with artificially cheap commodities like subsidized European sugar and American corn. Meanwhile imports are often kept out with tariffs and quotas, further distorting prices.
The US and EU both heavily subsidize farmers, and progress on curbing that spending looks more likely than agreement on import tariffs, where the two trade titans are far apart.
The US and other big exporters like Brazil and Canada want all countries to drop down to the same low tariff levels. The EU, Japan and others with high barriers want everyone to cut tariffs by the same proportion, reaching different final levels.
Other top EU concerns include consumer protection and stronger protection for farm products known by the region where they are made, such as Champagne, Parma ham and Parmesan cheese.
If nations can't agree, there is no chance of concluding the rest of the negotiations, leading developing countries to lose faith in creating a fair system, some trade experts say.
Negotiations are restarting after stalling while the EU decided on partial reforms to its multibillion-dollar agricultural policy. Those reforms will leave spending unchanged but gradually try to make farm support less trade-distorting by concentrating more on rural development and the environment.
Some negotiators questioned how much ground the Europeans are really giving.
"They may want to give the impression that they have moved, and now it's everyone else's turn to move, and it can't just be that," Vanclief said.
"It's clear that we now have an extra margin of maneuver, but this is not the EU coming with this big present and putting it on the table," said EU trade spokeswoman Arancha Gonzalez. "Of course we are ready to move, but we would want to see what the others are putting on the table."