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Pressure grows on EU in Hong Kong to agree to cut key agricultural subsidies

WTO Director-General Pascal Lamy, right, receives a ``Make Trade Fair'' petition that the aid group Oxfam International said was signed by 17.8 million people, from Mexican actor Gael Garcia Bernal, left, Hong Kong rocker Anthony Wong and African singer Angelique Kidjo in Hong Kong yesterday. The aid group contends that the global trading system is rigged in favor of rich nations and that new rules should be made to lift developing nations out of poverty. PHOTO: AP

Trade ministers from nearly 150 countries gathered in Hong Kong yesterday to work on a deal to open world markets and lift the global economy, with pressure growing for Europe to agree to a key cut in farm subsidies.

The WTO's 149 members have been working to agree a deal to cut tariffs and other barriers to trade that experts say prevent poorer nations from gaining access to world markets, and allow developed economies to grow.

Hopes for a deal at the six-day meeting -- opening formally tomorrow -- have been low since October, after preparatory talks failed to reach a breakthrough on the key area of agriculture subsidies and tariffs.

US trade representative Rob Portman yesterday put responsibility for success or failure square-ly on the shoulders of the 25-member EU which pays out billions of dollars each year in farm subsidies.

Earlier this year, the US offered to cut farm aid by 60 percent by 2010 if the EU scraps 80 percent of its subsidies. So far the Europeans have refused to budge.

"The key to development is market access, agriculture access is the top challenge and we think that we need to make more progress here," Portman said in Hong Kong.

"The US made a bold agricultural proposal in October that is yet to be matched by others, including the EU," he said.

Adding its voice to the dispute, Brazil, one of the leading developing countries at the talks, warned yesterday that no deal would be made unless the EU made bigger concessions on agriculture subsidies.

"Unless the European Union improves its offer on agriculture, I do not believe we can complete the Doha cycle," Brazilian Foreign Minister Celsio Amorim said, referring to the round of talks launched in the Qatari capital in 2001.

And Commonwealth secretary general Don McKinnon said that the developed countries, led by the EU, had to offer more ground.

"More has to be given than received by the developed countries," McKinnon said.

"If you see what's on the table now you're not seeing a lot of satisfaction -- much more is expected," the leader of the 53-member grouping of mostly former British colonies said.

"[Nothing is moving] because of the intransigence on agriculture," McKinnon said.

"Agriculture has become the trigger of trust. With a really significant move on that by the Europeans and the US, a whole lot of other things can happen," he said.

Agriculture is not the only issue to be discussed at the talks, which will also cover industrial goods and the service industries such as banking and insurance.

And a rather embattled EU trade commissioner Peter Mandelson said yesterday that he would not be offering any new concessions on agriculture, saying the emphasis had to go to other areas.

"I come to Hong Kong to do business with my partners and I hope that others have come to do business with me," Mandelson said.

"This doesn't mean I will be tabling a new agricultural offer. I don't believe that this is what the round needs now from Europe, even if we had the latitude to do so," the commissioner said, effectively barred by some EU member countries led by France from giving much ground on subsidies.

"It is therefore for others to come up with first or better prop-osals on the key areas of negotiations," he said.

Mandelson's spokesman said six heavyweight WTO powers -- Australia, Brazil, the EU, India, Japan and the US -- would hold preliminary discussions yesterday before the main talks open.

WTO Director-General Pascal Lamy said yesterday that developing nations will succeed in gaining concessions on agriculture because they form a majority in the global trade organization.
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