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Europe and US say they are ready to compromise

Filipino farmers walk in a rice field carrying freshly harvested rice, the Philippines' main agricultural product, in northern Pampanga province, yesterday. As the WTO wraps up its five-day conference in Mexico, the 146 member countries deliberated a new global trade pact that aimed to liberalize global trade but highlight the gap between rich and poor countries. Critics say that agricultural export subsidies, when offered by rich countries to their farmers, prevent their developing counterparts in the developing world from competing effectively. PHOTO: AFP

Talks aimed at unlocking efforts to lower global trade barriers entered their last scheduled day, with the US, EU and some large developing nations saying they are to ready to compromise.

A proposal yesterday from the WTO, covering agriculture, tariffs on manufactured goods, rules on investments and special treatment for poor nations, boosted hopes that negotiators may agree in Cancun, Mexico, on the outline for an accord.

"We're happy, but there's still a long way to go," Celso Amorim, Brazil's foreign minister, said. Brazil has led a group of 21 developing countries in a challenge to the EU and US, demanding a commitment from them to slash farm subsidies and accept more food imports.

A complete elimination of global tariffs would save between US$80 billion and US$500 billion annually, the WTO estimates. The Cancun meeting is a midpoint review, meant to give negotiations a boost to meet a Jan. 1, 2005, deadline for an accord.

"Sometimes it takes people having to look over the cliff and seeing what's down below before there begins to be movement," Keith Rockwell, the WTO spokesman, told reporters. "The realization is beginning to dawn on people that without compromise, there's not going to be movement and they're starting to realize what that means."

The WTO, the Geneva-based global trade arbiter, is trying to complete a new accord governing almost US$8 trillion in annual commerce.

"This is an acceptable basis for negotiation," Argentina's ambassador to the WTO in Geneva, Alfredo Chiaradia, told reporters.

The US$184 billion that the US, EU and Japan spend annually supporting their farmers keep prices for cotton, wheat, rice and other crops below market levels and undercut the ability of farmers in the poorest nations to compete and lift themselves out of poverty, the World Bank says.

Companies such as Deutsche Bank AG, Unilever NV and DaimlerChrysler AG have been pressing the US and EU to agree on farm aid reductions in order to achieve breakthroughs in trade rules that will boost other exports.

Manufacturers had been advocating the complete abolition of industrial tariffs. That wasn't part of yesterday's compromise.

"The text gives too big of a pass to the more advanced developing countries," said Frank Vargo, vice president for international affairs at the National Association of Manufacturers, which represents 14,000 companies in the US including General Electric Co and 3M Co.

The framework "is insufficient to get the enthusiastic backing of US manufacturing companies," Vargo said.

India and some industrialized nations including Switzerland, Taiwan, Israel, Bulgaria and Japan, all said they opposed the compromise because it reduces protection for their farmers.

"On a strategic level, there's already a blockage," Luzius Wasescha, Switzerland's chief negotiator, told reporters.

"For the time being there's nothing in it for us,"
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