World trade talks near deadlock

Efforts to bring trade liberalisation negotiations under the WTO's Doha Round back on track suffered a setback today with talks among the five key players""the US, the EU, Australia, Brazil and India ""collapsing on the issue of reduction of tariff and subsidies for agriculture products.

A two-day ministerial meeting of some WTO members collapsed yesterday, the opening day, due to the EU's inability to table an improved offer in the wake of resistance from France.

After the disagreements last evening, today's session, where the Five Interested Parties (FIPs) group were to be joined by six other countries, including Canada, Japan and Switzerland, was cancelled.

At the end, it was a familiar sight with US Trade Representative Rob Portman blaming the EU for derailing the negotiations after four years of painstaking talks as it did not budge on the thorny issue of farm reforms.

EU Trade Commissioner Peter Mandelson, however, said he was still working on achieving a favourable deal but insisted negotiations could not focus only on agriculture. "We want to see further movement on the issue of market access in agriculture, but this cannot be viewed in isolation, and the WTO members need to understand this," he said in a statement.

Despite the setback, Portman said he hoped the EU would come forward with an offer on tariffs as early as next week. "We plan to get together by phone....I am hopeful that they will be able to present a proposal by next week," he said.

Earlier this month, the US had offered to cut its most trade-distorting farm subsidies by 60 per cent over the next five years. The EU responded by offering to cut subsidies by 70 per cent but the US and Brazil wanted the 25-member trading block to improve its offer.

On its part, India resisted a strong move by the EU to link the treatment of sensitive products with special products. 'The two are conceptually different. Sensitive products are sensitive commercially, while special products are dependent on food and livelihood security, and rural development needs,' Commerce and Industry Minister Kamal Nath said today.

The G-20, the US and Australia have proposed limiting sensitive products to 1 per cent of tariff lines. The EU, however, has been offering 8 per cent of the tariff lines.

Nath said India could not offer any higher tariff cuts in agriculture than what was already contained in the paper tabled by the G-20 alliance of developing countries.