Textiles, farming hold up WTO agreement

Textiles, farming hold up WTO agreement

Jeremy Gaunt and Robert Evans, Reuters, Doha

Until late Tuesday evening Jakarta time, ministers from more than 140 countries could not yet reach a deal on new trade talks due to fights over textile imports and farms subsidies.

A draft agreement presented to ministers attending a World Trade Organization (WTO) meeting in the Gulf state of Qatar called for the opening of a "work program" on a range of issues designed to open global markets.

Although peppered with issues still to be sorted out before the five-day meeting was due to end at midnight, it effectively narrowed down major areas of dispute to two key areas.

Failure to reach compromise would bring down the delicate house of cards that has been constructed to meet the competing demands of rich and poor nations and the domestic political needs of individual countries.

It would also mean a second straight failure for the WTO after the collapse of negotiations in Seattle two years ago -- a specter that has motivated delegates in Doha to reach a pact.

In agriculture, the European Union, particularly France, found itself isolated against the rest of the world's demand that it commit to abolish the huge export subsidies it pays its politically powerful farmers.

The United States and Canada, meanwhile, were at loggerheads with developing nations led by India, Pakistan and Bangladesh over calls for rich countries to open their markets more quickly to textile products.

With host nation Qatar insisting on the midnight (around 4 a.m. Jakarta time Wednesday) deadline, trade officials earlier cited progress in reaching agreement while cautioning that many gaps remained.

"It is definitely very doable to complete this conference successfully today with the launch of negotiations provided everybody keeps our eyes on the big picture," a senior U.S. official told reporters.

A tentative agreement reached late on Monday on a separate pact that would ease the way for poor countries to skirt drug- patent laws to fight devastating epidemics such as AIDS added momentum to the overall negotiations.

WTO ministers have been meeting under high security, cordoned off in a luxury hotel on the Gulf shore guarded by armed soldiers and U.S. marines standing ready in ships at sea.

The goal is to agree a new series of talks to liberalize more world markets, a move advocates say would infuse the sickly global economy with new vigor and create wealth for all.

The draft agreement, which must be approved by all 142 WTO members, called for the talks to start next year, probably by the end of January.

It proposed negotiations on liberalizing industrial tariffs and on ensuring transparency in government procurement.

It also sought to meet demands for help by poor countries by setting up special WTO groups to look at issues of debt and finance and trade-related aspects of the transfer of technology.

The tentative agreement on drug patents was confirmed in the draft. It will mean that countries ravaged by public health crises like AIDS and malaria will be able to produce or buy cheaper generic drugs.

But key differences remained in the areas of supporting agriculture and opening markets to cheap textile imports.

The 15-nation EU has agreed to negotiate the reduction of agriculture export subsidies but has remained adamant that it will not accept a call for their eventual abolition.

The Organization for Economic Cooperation and Development estimates that total EU support for agricultural producers amounted to US$90.23 billion in 2000 compared with $59.89 billion in Japan and $48.96 billion in the United States.

The EU's Common Agricultural Policy was a founding pillar of the bloc's attempts to integrate its economies.

On textiles, India has taken a particularly hard line in demanding that rich countries open up their markets to more of their goods -- the lifeblood of many developing economies.

Officials said the United States had met Indian officials to try to solve the problem but had not succeeded.

India, for its part, threatened to block overall agreement without some acceleration of the current schedule of increasing textile import quotas.

The United States says this is a bilateral issue that cannot be agreed under U.S. law at Doha. Any such agreement would not pass the U.S. Congress, officials said.