Prospects cloudy for WTO meeting in Hong Kong

"All we'll see in Hong Kong is an attempt to find the lowest common denominator in order to avoid a repeat of Cancun."

Jean-Pierre Lehmann, head of the Evian Group

With exactly one month to go before the Hong Kong WTO conference, analysts are struggling to predict the result of the gathering, despite a frenetic bout of talks.

After WTO heavyweights again failed to break the deadlock this week, trade ministers from the 148-member organization decided to curtail the conference's scope.

The Dec. 13 through Dec. 18 conference was initially billed as a final staging post in the Doha round of trade liberalization negotiations, which aim by the end of next year to yield a treaty cutting barriers to commerce.

But ministers this week acknowledged they would have to "recalibrate" their original target to approve the outlines of the accord, though they insist they are still committed to the round.

Jean-Pierre Lehmann, head of the Evian Group, a Swiss-based think tank, said: "The bar has been lowered to just three millimeters off the ground.

"All we'll see in Hong Kong is an attempt to find the lowest common denominator in order to avoid a repeat of Cancun," Lehmann told reporters, referring to the WTO's failed 2003 conference in the Mexican seaside resort.

A key plank of the Doha round, launched in the Qatari capital in 2001, is to use trade to boost developing countries.

Powerful developing countries such as Brazil and India argue that farm subsidies in rich nations -- the US and the EU in particular -- depress global farm prices and prevent growers in poor nations from competing fairly on world markets.

And they dismissed recent trade-opening offers from the EU and the US as inadequate.

Brazil and India, which steer the G20 developing country lobby, also want the farm subsidies controversy settled before parallel talks on trade in industrial products and services, such as banking, are stepped up.

WTO chief Pascal Lamy said this week that there were "audacious" proposals on the table but admitted: "The problem is that they are not sufficiently compatible."

On Friday, Peter Power, spokesman for EU Trade Commissioner Peter Mandelson, said: "What we are aiming for is an agreement on the maximum degree of convergence on all areas of the talks."

Earlier this week, Mandelson said WTO members must do something in Hong Kong to benefit the world's poorest nations.

He called for "a clear, itemized development package to be agreed at Hong Kong as an early harvest, regardless of progress in the other areas."

Diplomats said Mandelson's suggestion received a cool reception from other WTO members, including Brazil and India.

Mandelson has said that those two countries don't represent the interests of all poor nations, but they claim he is attempting to divide the developing world by offering a partial package rather than waiting for a full deal.

"Nobody at this very late stage should try to reinvent the mandate. If people try to do that then their motivations are suspect," said India's trade ambassador Ujal Singh Bhatia.

Lamy on Thursday urged member states to go beyond stocktaking in Hong Kong.

The specific aim in Hong Kong had been to build on a framework agreed in the summer of last year and to produce what are known in WTO jargon as "modalities" -- formulas and other guidelines for reducing trade barriers that are the bedrock of a treaty.

The interim deal last year included several agreements in principle, including one to eliminate export subsidies in farm trade.