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Last Updated: Thursday, 31 July, 2003, 10:41 GMT 11:41 UK
Trade talks still have 'way to go'
Canadian Trade Minister Pierre Pettigrew
Canada is one of the countries fighting the US and EU on farming
Trade talks in Montreal have ended with optimistic noises from ministers about the prospects for a make-or-break meeting in the Mexican city of Cancun in six weeks' time.

But behind the upbeat rhetoric, the industrialised countries - the US, the European Union, Japan and Australia - have barely shifted from the positions which have frozen negotiations for 18 months.

Hopes that the ministers' meeting could free up the roadblock on agricultural subsidies and market access, key issues for developing countries, seem to have been dashed.

Without solid progress in backstairs talks between the big players, the chances of pushing forward what was headlined a "development agenda" for world trade look remote.

"My sense is that some defrosting is happening, but we are not yet at the sort of global warming drive that will be needed," said Pascal Lamy, the EU Trade Commissioner.

Hurdles

South African Trade Minister Alec Irwin was more blunt about the challenge ahead.

US Trade Representative Robert Zoellick
I would be less than frank if I didn't say that I think a number of countries were pretty disappointed
Robert Zoellick
US Trade Representative
"We have got a major problem," he told reporters.

"It's going to be tough."

And Indian IT and Communications Minister Arun Shourie said that the US-UE talks would only be acceptable if they were "transparent".

"We don't want to see any surprise, sudden draft texts," he said, referring to a previous last-minute agreement reached in 1992.

Developing countries want action not only on agriculture, but also protection of their right to break patents on expensive drugs needed to fight health emergencies such as HIV/Aids and pneumonia.

In addition, they are worried about the push by industrialised countries to institute investment protection rules before the issues they are concerned about are resolved.

Same song, different words

Part of the problem is that the main protagonists are still often speaking a different language.

Japan, Europe and the US massively subsidise their farmers - but in different ways, which allows them to accuse one another of misbehaviour while absolving themselves of much of the blame.

European Union Trade Commissioner Pascal Lamy
The EU's Pascal Lamy has some hard talking ahead
US Trade Representative Robert Zoellick, for instance, told reporters that EU export subsidies amount to $2-5bn a year, while the US equivalent was just $15m.

"I would be less than frank if I didn't say that I think a number of countries were pretty disappointed that we don't yet have the EU eliminating export subsidies," he said.

Damage

The EU does subsidise exports heavily, as well as paying farmers to produce more, which is often then dumped on overseas markets.

But while the US does indeed forswear direct export subsidies, direct aid to farmers - recently increased by more than $50bn over 10 years - allows them to sell overseas at below cost.

That, aid agencies and activists charge, does just as much damage to farmers in Africa, Asia and Latin America.

In addition, food aid to foreign countries in the form of US government credit guarantees is conditional on buying US produce - although the US has said it is ready to talk about scaling this programme back.


WATCH AND LISTEN
The BBC's Lee Carter
"Non-governmental organisations say they are not impressed with either side"



SEE ALSO:
Glimmer of hope for trade talks
30 Jul 03  |  Business
Agricultural trade clash at summit
29 Jul 03  |  Business
Chaos at WTO farm talks
24 Feb 03  |  Business
Dhaka talks seek trade gains
30 May 03  |  Business
Doha trade deal unravelling
10 Nov 02  |  Business
Triumph for world trade talks
14 Nov 01  |  Business
India tops WTO anti-dumping list
23 Apr 02  |  Business


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