Walsh prepared to veto WTO deal

The Minister for Agriculture, Mr Walsh, has warned that he will block the launch of any new trade round that commits the EU to eliminating or phasing out subsidies to farmers.

In Doha, where he is attending a Ministerial Conference of the World Trade Organisation (WTO), Mr Walsh said the EU must not budge in its opposition to demands from the US and other countries that export subsidies and direct income support should be phased out.

He said: "It is no more acceptable today than it was two years ago in Seattle. It is unacceptable."

Failure to agree on farm subsidies was among the reasons the last attempt to launch a trade round failed in Seattle in 1999.

The European Commission has a mandate to negotiate on behalf of the EU on the basis of positions agreed between the 15 member-states. The mandate includes a commitment to reject an agreement that obliges the EU to reduce subsidies with a view to phasing out or eliminating them.

But some member-states, including the Nordic countries and Britain, have indicated that they are willing to compromise on agriculture to secure a deal on other issues.

Only Ireland and France have stated that there is no room for compromise on subsidies to farmers, an issue that the French trade minister, Mr Francois Huwart, said could prevent a trade round being launched. "It is a breaking point with great consequences," he said.

According to sources close to the talks, Mr Huwart made clear to other EU ministers that he has instructions from both President Jacques Chirac and the Prime Minister, Mr Lionel Jospin, not to compromise on agriculture.

The EU cannot accept a deal in Doha unless all 15 member-states agree to it.

Mr Walsh pointed out that direct payments account for 60 per cent of the average Irish farmers' income. As a state that exports one third of its agricultural produce outside the EU, Ireland has an important interest in retaining export refunds, he said.

He insisted that agreement was possible in Doha without changing the EU's position on agriculture, which has taken the member-states two years to agree.

"There is no reason why agriculture should be made a sacrificial lamb for a new trade round."

There were signs yesterday that the WTO meeting was nearing agreement on the issue of access to medicines for poorer countries. The 142 countries are expected to agree to a declaration asserting that WTO patent protection rules should not prevent countries from protecting public health.

Poorer countries want to be allowed to produce and import cheap, generic versions of expensive drugs, particularly treatments for HIV and Aids. Other contentious issues include an EU demand that environmental standards should play a role in any new trade round.

The EU has already signalled that it is prepared to abandon a call for investment and competition to play a role in the trade round.

But Mr Walsh was adamant that there would be no deviation from the agreed EU line on agriculture. "I'm here to ensure that the European Commission's mandate is strictly adhered to," he said.