WTO talks deadlocked as EU, US disagree on subsidies

The World Trade Organisation talks in Hong Kong remained deadlocked last night as pressure mounted on the European Union to agree a firm date for eliminating farm export subsidies, write Marc Coleman, Economics Editor, in Hong Kong and Jennifer Duggan.

The Government was strongly defending the EU's negotiating position on the Doha round as the US and EU blamed each other for the lack of progress.

The US and the G20 say breaking the deadlock in agriculture is the key to making progress in the rest of the negotiations. They insist the onus is on the EU to improve its offer on market access and are pressing it to agree this week to commit to phasing out all export subsidies by 2010.

The Minister for Agriculture, Mary Coughlan, said EU concessions to date on agriculture were being taken for granted.

The EU has to eliminate agricultural export subsidies as part of an overall package of measures including liberalised trade in services and measures to aid developing countries. But the EU is seeking increased access to developing country markets before it agrees to a date for ending subsidies.

"It is not acceptable that concessions in agriculture are a condition for movement in other areas. The commission must vigorously resist demands for any further concessions in the form of an end-date for export refunds without full parallelism," Ms Coughlan said. "If we concede on a date for export subsidies this will lead to demands for further concessions in the area of market access," a spokesman for the Minister said.

"There has been little or no movement by the negotiating partners in relation to export credits, state trading enterprises and food aid and we must stand firm, therefore, in defending the position we have agreed in the council."

US representative Rob Portman said progress would require further EU concessions. "I'm a little more encouraged because what I also hear is that Europe is more ready to move on agriculture if agreement can be reached on these other areas, particularly industrial tariffs being removed and the removal of barriers to services. I'm hoping that's a bargain that can be struck."

Ministers from 149 WTO member states are also striving to agree a package of trade and aid measures for poor countries, which they hope will be one of the few tangible results from this week's meeting. It would include increased technical assistance, removal of import duties and quotas, and measures to help West African cotton producers. World Bank vice-president Danny Leipzinger said there had been a lot of talk about development but not enough action.

"The rich countries have transferred more than $2 billion to their farmers in various forms of support since the talks began on Tuesday," he said. "In the same period, the 300 million poorest people in Africa have earned less than $1 billion between them." Protesters continued to attempt to disrupt the talks yesterday although the atmosphere surrounding their actions was more festive.