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Friday, 12 October, 2001, 12:10 GMT 13:10 UK
Key trade talks in the balance
Ships in Singpore harbour
Singapore, host of the trade talks, has been badly affected by the downturn
By BBC News Online's Steve Schifferes and BBC economics correspondent Andrew Walker

The future of world trade talks could be decided at a meeting in Singapore this weekend.

Twenty-two trade ministers are meeting on Saturday and Sunday in an effort to narrow their differences about the agenda for a new trade round.

A full ministerial meeting of the World Trade Organisation is scheduled for November in Doha, in the Gulf state of Qatar, where WTO director general Mike Moore and the leading member countries want to launch the new set of talks.

The terrorist attacks on the US may have improved the chances of their success, as many governments are now anxious to demonstrate a new spirit of international cooperation.

But first the ministers must resolve major differences over the scope of any future negotiations.

Failure at Seattle

The WTO failed in its plan to launch a round at its previous ministerial conference in Seattle in the US in 1999.

There were major divisions between the member countries about what should be on the agenda.

There were also large scale demonstrations on the streets by people opposed to globalisation, and in many cases to the very existence of the WTO.

Many of the disagreements from that meeting are still unresolved - although anti-globalisation protesters are likely to be thin on the ground.

The European Union wants negotiations about rules on how foreign investors can be treated, about anti-monopoly policy and about the relationship between trade and the environment.

The developing countries are extremely suspicious that any new rules in these areas might be abused to discriminate against their products.

They also want what amounts to renegotiation of earlier agreements which they say have not delivered the expected benefits and are onerous to implement.

They are particularly concerned about rules on patents, which they argue has made the cost of urgently needed medicines too high in poor countries.

Agricultural impasse

Agriculture is, as usual, a thorny issue.

Food exporting nations want a new round to lead to substantial reductions in Europe's farm subsidies.

In particular they want the EU to phase out its export subsidies which they believe are particularly detrimental to their own farmers.

But Japan and Europe want to retain the right to subsidise their farmers in order to preserve the rural way of life.

US political problems

The United States usually takes the lead in trade talks, but trade has become a highly political issue in Congress.

The Democrats - who now control the Senate - want any trade talks to include negotiations on labour standards, which poor countries oppose.

The impasse has meant that the US Congress has not yet granted the President trade promotion authority - which would ensure that any trade deal must be approved as a whole rather than subject to legislative renegotiation.

And US businesses are lining up to oppose attempts by the WTO to limit "anti-dumping" sanctions, which allows governments to impose tariffs on goods sold too cheaply in foreign markets.

Trade disputes remain

The EU and the US are still engaged in a number of serious trade disputes.

The EU wants to stop the US from subsidising the foreign sales of US companies through tax breaks.

And it has obtained a judgement from the WTO that says these are illegal - which could lead to $4.5bn of trade sanctions against US goods.

If attempts at promoting free trade fail, then trade battles between the world's leading countries could intensify.

World trade has already been badly affected by the worldwide slowdown, with the UN predicting that total trade will barely grow at all this year.

That has added to the urgency felt by world leaders in ensuring that these trade talks succeed.

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