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.