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Last Updated: Saturday, 13 September, 2003, 02:55 GMT 03:55 UK
Tough talking at trade summit
Protester outside Cancun conference
Tough talking is also going on outside the conference centre
World trade talks are hanging in the balance as negotiators attempt to break the deadlock on farm subsidies.

The United States and Europe have clashed with developing nations on the third day of discussions in Cancun, Mexico.

Singapore Trade Minister George Yeo, who has been given the job of bringing the two sides together, is expected to offer a compromise farm trade reform plan by Saturday.

But the BBC's Andrew Walker in Cancun says that although Mr Yeo talks of signs of flexibility, there is not much evidence of it in public statements by the participants.

The so-called G21 group, which includes Brazil, China and India, wants a sharp cut in aid for farmers in rich nations.

The EU and US say poorer countries must agree to broader legal and commercial reforms in return for any concessions on farming.

Mr Yeo has been meeting with the United States, the EU, the G21 and other WTO members since Wednesday in an attempt to forge a position that all countries can accept.

Ministers representing 146 WTO members have until Sunday to overcome several obstacles holding up progress towards a new global trade deal.

Fundamental reform

"Rich countries clearly have to do more than developing countries," EU Farm Commissioner Franz Fischler told reporters.

"But we also expect from the G21 that they stand ready to address farm protectionism also on their side."


In response, Brazil, which is speaking for the G21 group, said it was committed to reaching an agreement in Cancun that would "pave the way to fundamental reform of agricultural trade", an indication it was willing to be flexible.

The EU says it is willing to abolish export subsidies only on some farm products that are of special interest to developing countries.

But the Indian Commerce Minister, Arun Jaitley, said the EU's position was not good enough, saying that "export subsidies on all products have to eventually go".

But EU officials say that even by offering to eliminate export subsidies on some products, they are stretching the negotiating instructions agreed by EU member countries to the limit.

'Unhelpful comments'

On Thursday, the US delegation, led by US Trade Representative Robert Zoellick, was accused of trying to lure smaller countries into dropping out of the G21 with trade incentives - something it has vehemently denied.

However, some observers insist the rich nations are working behind the scenes to undermine the G21's position.

Oxfam protest
World leaders are the target of protests
"The EU and US are making a show of playing the nice guys but behind closed doors the pressure is on.

"If the talks collapse that is good news: it could open the door to more sustainable trade," Alexandra Wandel, Friends of the Earth's Europe trade campaigner said.

Such comments were branded "incredibly unhelpful" and "self-indulgent" by one European trade delegate, who did not want to be named.

Small farmers

Also blocking progress at Cancun are the so-called Singapore issues - investment, competition policies, trade facilitation measures and government procurement.

While Japan, Canada and the EU are pressing for WTO negotiations on such questions, developing countries say the time is not right.

They are particularly opposed to the formulation of WTO policies governing cross-border investment, fearing such regulations would benefit multinational corporations at the expense of their own industries.

Meanwhile, a new alliance of 33 developing countries has appealed for special WTO measures to help small farmers whose interests have been harmed by trade liberalization.

"It is crucial that the Cancun meeting conclude with a commitment to safeguard small farmers in developing countries," said Indonesian Trade Minister Rini Sumarno Soewandi.

The BBC's Limden Kemkaren
"[Representatives from] Brazil said the emphasis should be on achieving reforms rather than attacking each other"

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