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Tuesday, 13 November, 2001, 13:32 GMT
EU under pressure at trade talks
EU Trade Commissioner Pascal Lamy
Pascal Lamy: the EU is under pressure to compromise

Ben Brown

The future of the world trading system is hanging in the balance as talks to launch a new trade round enter their final day.

Trade ministers have been given to midnight on Tuesday to come up with a deal that will allow negotiations to begin on expanding free trade rules.

EU negotiators, who are under the most pressure to make concessions, have reportedly said that they cannot exclude the possibility of leaving the talks if they do not get more progress on agriculture and the environment.

World leaders have set high hopes on agreement, in order to send a signal that collective action to help revive the slowing world economy is still on the agenda.

The latest draft proposal shows that disagreements are narrowing, but differences remain on textiles, agricultural subsidies, and eco-labelling.

Developing country row

The talks have been given a boost by a separate agreement on greater access to medicines to meet public health emergencies, which many developing countries were seeking to help deal with the crisis of Aids and other pandemic diseases.

But those African, Caribbean and Pacific countries who have a separate trade deal with the EU, have threatened to hold up progress unless the WTO separately agrees a waiver to that deal.

Kenyan Trade Minister Kipyator Biwott said "this is matter of life and death."

However, Honduras, whose banana exports have been affected by EU quotas, refuses to agree.

Developing countries have also been offered further concessions on textiles to speed up the existing agreement which will end quotas for all their textiles and clothing products by 2004.

The United States says it would be impossible to accept any changes to the existing textile deal without Congressional approval.

EU under pressure

But it is the EU that is under increasing pressure to make concessions to ensure an overall deal.

The EU's ambitious plans to expand trade negotiations to cover areas like the environment, investment and competition policy have been virtually abandoned after criticism from developing countries like India, who believe these issues would be too difficult to resolve.

In the latest draft proposals, a decision about whether to include investment and competition has been postponed for two years.

Eco-labelling hopes

A senior US official, who also expressed optimism that a deal was "very doable", said that the onus was on the EU - "who are seeking this new round of international negotiations" - to give that goal priority over any individual demand.

The EU has already abandoned its plans to try and put the so-called "precautionary principle" at the heart of trade and environment issues, according to the UK Environment Minister Michael Meacher.

But it is still hoping for agreement on eco-labelling so that consumers can be informed about the environmental impact of the products they buy - but it is finding opposition from other countries.

Agriculture remains the key

The EU is also under pressure to abandon its tough line on agriculture.

Other countries, especially from the Cairns group of agricultural exporting nations, are pressing for a deal which says the aim of negotiations is the "substantial reduction in, with a view towards phasing out, agricultural export subsidies."

The French economy minister Laurent Fabius said that "no European" could accept such a clause, as it implies a pre-determined end-point for the negotiation.

But the EU admitted that it was isolated on this issue, with even Japan - which has a highly protected agricultural sector - unwilling to back the EU line.

However, with all 15 EU countries having to agree any trade deal negotiated at Doha, and with France facing elections early next year, there could be a long night of negotiations ahead.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Andrew Walker
"There are one or two previously unthought of problems that have come out of the woodwork"
See also:

13 Nov 01 | Business
WTO confirms drugs deal
08 Nov 01 | Business
Doha on high alert
12 Nov 01 | Business
Luxury and squalor in Doha
12 Nov 01 | Business
WTO breakthrough on medicines
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