WTO begins final drive in framework for trade talks

World Trade Organisation (WTO) members yesterday began a final effort to hammer out the main elements of a comprehensive negotiating framework for the Doha world trade round that would be endorsed by ministers when they meet in Cancun, Mexico, in two weeks.

The intense diplomatic activity centres on a proposed ministerial declaration drafted by Mr Carlos Perez del Castillo, the Uruguayan chairman of the WTO's ruling general council. It seeks to strike a balance between governments' divergent positions on issues ranging from farm trade to proposed multilateral investment rules.

But although the draft aims to meet at least some of the demands of each of the organisation's 146 members, it has so far drawn widespread criticism. While some governments have attacked its proposals as too ambitious, others complain that they fall far short of what is needed.

Nonetheless, Mr Perez del Castillo insisted he intended to stand his ground and resist pressures to re-write large parts of it.

"That is my best shot. I will listen to proposals and I will comment afterwards," he said before WTO ambassadors started debating his text in Geneva yesterday.

Mr Supachai Panitchpakdi, WTO director-general, urged ambassadors to accept the draft as a working basis for the Cancun meeting, warning them that "it would be all too easy to unravel the text. But if we did so, it would be almost impossible to put it all back together."

Agriculture remains the most contentious issue. Mr Perez del Castillo's draft goes beyond a recent joint proposal by the US and the European Union in its proposals for cuts in domestic support and a "phasing out" of export subsidies.

It also calls on rich countries to cut border barriers much more deeply than poor ones.

Brazil, a leading agricultural exporter, condemned the proposals as insufficient, but Japan said they went too far.

Japan, which imposes duties on rice of almost 1,000 per cent, strongly objected to a proposal to impose a ceiling on agricultural tariffs. The EU also said the proposals on domestic subsidies went beyond what it was prepared to accept.

Many developing countries are resisting proposals to cut their industrial tariffs sharply and to scrap them entirely on some products.

Some trade officials believe agreement may be reached only if poorer nations are allowed to opt out of eliminating their duties.

Controversy is also raging over demands by the EU, Japan and Switzerland for WTO investment rules. India and other developing countries are strongly opposed.

A battle also looms over insistence by Arab states that the Arab League participate in WTO talks on trade and environment - a demand the US and Israel oppose. - (Financial Times Service)