Cool reception for WTO plan

A compromise plan to reform farm subsidies - aimed at breaking the deadlock in world trade talks - has been given a cool reception by the major exporting nations.

In a joint statement, the countries said the proposal did not go far enough towards ending subsidies for rich states.

"The great majority (of farm exporting countries) are disappointed with this document.

"There is a great deal of frustration," said one trade envoy from a Latin American country.

Collapse threat

He was speaking after countries from the so-called Group of 17, a new alliance of Latin American and Asian countries, met to discuss their stance on the blueprint put forward by the chairman of the WTO's executive General Council late on Sunday.

WTO officials worked through the weekend to produce the blueprint, conscious of the importance of reaching an agreement at September's ministerial meeting in Cancun, Mexico.

The alternative would almost certainly mean the failure and collapse of what is known as the Doha Round, the latest effort to liberalise world trade.

Rich country farm subsidies that block exports of cheaper food by the poorer countries have been the biggest sticking point in the new round.

The draft solution, drawn up by Uruguayan ambassador Carlos Perez del Castillo, with the backing of WTO chief Supachai Panitchpakdi, sought to bridge a wide gap between major exporters and recent allies the European Union and the United States.

Meeting postponed

It also aimed to take account of the views of other rich states which are mainly farm goods importers, like Japan and Switzerland, and poorer developing countries.

WTO officials say their proposals borrow heavily from the terms of an agreement between the two biggest farm subsidisers, the United States and the European Union, a week ago.

But it has had a frosty reception from some countries in Geneva.

"It (the text) has come down too close to the EU-US positions," said another Latin American envoy.

Trade diplomats from the full WTO membership of 146 states were due to hold their first session on the plan later on Monday.

But the start of a two-day meeting of the General Council, which must approve it or reject it, was put back until Tuesday.