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Last Updated: Monday, 26 January, 2004, 06:46 GMT
Sugar sours Australia trade talks
Sugar cane
A row over sugar looks set to scupper plans for a US-Australia trade deal.

The two nations - allies in the US-led war on Iraq - have been working towards a comprehensive deal for months.

But Australia is determined that sugar, a vital industry in the north of the state of Queensland, should be included.

And with elections at the end of this year, the Bush administration wants to keep its own powerful sugar cane and sugar beet industry onside.


For Australian Prime Minister John Howard, the trade deal has been a key priority.

Friendship doesn't always amount to a lot
John Howard, Australian Prime Minister
Mr Howard has said it could mean an extra 4bn Australian dollars ($3.1bn; 1.7bn) a year in trade revenue.

But the 120,000 jobs which the sugar industry provides are also crucial.

And Mr Howard made clear on Monday that he knew that whatever the two countries' close working relationship on defence and security, where trade was concerned "friendship doesn't always amount to a lot."

Australian media have been speculating that during talks in Washington DC this week, Trade Minister Mark Vaile would offer to leave sugar out of the deal.

Mr Vaile has dismissed the suspicion, supported by his prime minister.

"Unless we get concessions on the agriculture front, the trade agreement is not worth signing," Mr Howard said.

The US has been trenchant in keeping agricultural concessions out of the barrage of trade deals it has signed recently.

US farmers are seen as important to President George W Bush's hopes for re-election in November, making hopes for concessions on dairy or beef just as unlikely.

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