Farm aid breakthrough in three months

NEW YORK - World Trade Organisation negotiators have given themselves three months to reach an agreement on farm-export subsidies, saying they will not be able to overcome major stumbling blocks at next week's Hong Kong summit.

Trade ministers from the US, European Union, Brazil, India, Japan and Australia have said they may be able to resolve differences over spending that supports farm exports by March 1.

The biggest obstacles are agricultural talks and disputes about cuts in tariffs, domestic subsidies and export grants for farmers.

"I just don't see the stars aligning that we would like to see" for a breakthrough at the December 13-18 summit, US Trade Representative Robert Portman said.

"Hong Kong will be a stocktaking, there will be some negotiation, but it will be on the margins."

Two of the WTO's last three summits, in Seattle in 1999 and Cancun, Mexico, in 2003, collapsed.

The ministers agreed there was little chance much progress would be made at the six-day Hong Kong meeting. Portman called March 1 "a date for settling negotiations" on a specific set of issues relating to export support.

He identified these as the EU's use of export subsidies and state trading monopolies in commodities such as sugar, wheat and milk in Australia, Canada and New Zealand.

The WTO discussions are running up against a mid-2006 deadline to allow enough time to collate thousands of pages of rules, customs duties and commitments before the Bush Administration's negotiating mandate expires in 2007.

- BLOOMBERG