Traders talk turkey as WTO failure no option

By BRIAN FALLOW

WELLINGTON - World trade ministers, who have begun talks in Seattle aimed at launching a round of global trade negotiations, have their work cut out for them.

Preparatory talks among officials in Geneva broke up last week without agreement on even the flimsiest of draft documents to put before their political masters in Seattle, so wide are the divisions among them.

"It's going to be challenging," said outgoing International Trade Minister Dr Lockwood Smith who, together with his likely successor Jim Sutton, is heading the New Zealand delegation.

The United States' top trade official, Charlene Barshefsky, chairing the meeting of 134 ministers, said some sort of reform agenda would emerge because "everyone knows failure is not an option".

The challenge is to agree an agenda for the millennium round which offers everybody prospects of gains in areas that matter to them without overburdening the process so that its goal of an agreement within three years is unachievable.

The main bones of contention are:

* Agriculture. Progress towards liberalising trade in farm products is automatically on the agenda for the next trade round, as a legacy from the Uruguay Round which ended five years ago.

The Cairns Group of 18 agricultural exporters, backed by the US and armed with a supportive declaration from the Auckland Apec meeting, is calling fro substantial improvements in market access, the elimination of export subsidies, and substantial reductions in domestic support.

This puts them at odds not only with the Europeans but Japan and Korea who are emphasising the "multi-functionality" of agriculture.

The European Union's agriculture commissioner, Franz Fischler, said on Monday the EU was ready to pare back agricultural export subsidies but abolishing them altogether was not realistic.

The EU also wants food safety issues on the agenda.

* Implementation of existing WTO agreements. Anti-dumping actions are a sore point with developing countries who complain that access to rich markets is often stymied by anti-dumping actions, permitted under WTO rules.

Japan, which has been on the receiving end of US anti-dumping measures on steel also wants them on the agenda. But US under-secretary of commerce David Aaron said on Monday that insisting on that could torpedo the new round. Some developing countries have also called for some latitude in enforcing rules protecting intellectual property from piracy, which also raises hackles in the United States.

* Labour. The US is also at odds with poorer countries over bringing the issue of labour standards within the ambit of world trade talks.

Scenting the danger of protectionism, they argue that labour standards are a matter for the International Labour Organisation not the WTO.

The EU has proposed a compromise in which labour standards would be studied by a working group.

* Investment. The EU wants the talks to embrace rules on international investment and competition policy.

How vexed an issue this can be was clear from the ultimately fatal opposition the OECD's Multilateral Agreement in Investment (MAI) encountered.

The Europeans say these aspects of an increasingly global economy have to be tackled.

The other side of the argument including the US and New Zealand, while not disputing their importance, say they are too far from consensus to be handled as part of a three-year negotiating round.