Farm trade breakthrough lacking but talks go on

Farm trade talks in Geneva have failed to deliver a breakthrough ahead of a key World Trade Organisation meeting in Hong Kong in December.

But incremental progress in the talks means key trade ministers will continue negotiations next week.

Trade Minister Jim Sutton said the political will to advance the negotiations was evident but positions were still far apart in some areas.

Agriculture is widely seen as the key to a successful Doha round of world trade negotiations.

Ahead of the Geneva meeting, the US had offered to make some deep cuts in its most trade-distorting farm subsidies, putting the onus on the EU to offer concessions in its turn.

Reuters reports that the EU did give some ground on tariffs but US, Australian and developing country negotiators said it fell short of what was needed.

Ministers meet again next week.

"My feeling is that the US domestic support proposal will have a comparable effect to the European Union's 2003 reform of its Common Agricultural Policy," said Sutton.

"While some say neither move goes far enough, they have provided enough of a basis to unblock the discussion and move forward."

The same could not be said for negotiations aimed at opening markets, on which positions remained far apart, he said.

"While the EU recommitted itself to the mandate - a substantial improvement in market access for all products - its proposals did not match that commitment. The G10 [Japan, Switzerland, Norway and other big subsidisers] is also falling short."

Sutton said WTO members agreed all markets must show real improvements in access, subject to appropriate special treatment for developing countries.

"It is essential that the work on market access is brought up to the same level as domestic and export subsidies, where there is a good basis for a deal," he said.

"This is the blockage that must be cleared, and cleared quickly, if we want a successful ministerial meeting in Hong Kong in December."

Oxfam described the US offer as smoke and mirrors on the grounds that the proposed cuts were from the maximum levels of support the US was allowed under present trade rules rather than the actual levels of subsidy it gave its farmers.

But US Trade Representative Robert Portman disputes that, saying the proposed cuts were so deep they would nearly halve actual payments of the most trade-distorting subsidies. US lawmakers had made it clear their support for such a proposal would be conditional on reciprocity from other players.