EU wants changes to draft world trade deal in run up to meeting

The European Union believes progress has been made in the run up to a world trade meeting next week, but changes will have to be made to a current draft deal to satisfy the EU, trade commissioner Mr Pascal Lamy said.

Mr Lamy insisted the EU was keeping faith with promises to meet commitments to reduce its controversial billions of dollars of support for its farmers, but there were limits beyond which it could not go.

A meeting of the World Trade Organisation (WTO) in Cancun, Mexico, next week will mark the halfway stage in the Doha Round of talks to liberalise world trade. They were launched at the end of 2001 in the Qatari capital and are due to end in 2004.

"The structure of what is on the table [the draft agreement\], provided it is amended in the right direction - not reconstructed, not reshaped, not redrafted, but amended in the right direction - can provide for [a successful meeting\]. "But we are not there yet," he said.

The Cancun meeting aims to approve a text that will provide the basis for wrapping up the trade round.

Mr Lamy said the EU was concerned the draft text, drawn up by the WTO for approval in the Mexican resort, might lead to a promise to eliminate subsidies on agricultural exports, something to which the 15-nation bloc cannot commit.

"We have kept extremely good faith in this deal," he said.

"We have always said we would reduce export subsidies, we have consistently reduced export subsides...We are committed to reducing that, but this notion that zero is the big prize is not defensible," he said.

The EU has been criticised for a farm support policy that, according to some aid groups, means each European cow has more spent on it than some people in poor countries have to live on.

The 15-nation bloc has recently reformed its €40-billion Common Agricultural Policy, although this was criticised by some trade partners for not going far enough.

Mr Lamy recalled that the EU had promised to cut export subsidies to zero on crops of interest to developing countries, who are supposed to benefit most from the trade round, but said he had had no requests yet from any country for such an elimination.

With the world economy stumbling, Mr Lamy said the two big players in world trade, the EU and the United States, were both working to promote the trade talks despite some disputes between them, and the talks could still produce good news.

"It gives a signal that we all care about this, that we are ready to do the necessary compromises, that the multilateral trading system is well and alive.