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Last Updated: Thursday, 15 December 2005, 14:34 GMT
Trade talks: key issues
Talks between ministers at the World Trade Organization summit in Hong Kong are continuing. BBC News looks at the issues which are key to the negotiations.

AGRICULTURE

At the heart of the Hong Kong summit is the question of poor countries' access to rich states' agricultural markets.

US cotton farming
US support its for cotton farmers has poorer countries up in arms

Farmers in many developed states receive heavy subsidies, which makes it hard for poor country farmers - who may be more efficient - to export their goods to the biggest markets.

As well as subsidies - such as the European Union's Common Agricultural Policy, or US export subsidies designed to make US farm products cheaper overseas - tariffs or quotas can block agriculture exports.

The US and the larger developing countries (G20), as well as big farming nations like Canada and Australia, want the EU to go much further than it has in reducing its subsidies and increasing market access for farm goods.

It is also unpopular for its high tariffs on bananas - which replaced its long-standing system of quotas with special preferences for imports from former colonies. Latin American banana producers believe they could export more bananas to the EU, while the former colonies worry about losing their preferences and want compensation.

But the EU says it has gone far enough, and will not make another proposal until countries move on the issues at stake in the trade round.

And the US is under fire for its generous cotton subsidies. West African producers want the US to abolish these subsidies, but the US says it will only do so as part of an overall deal on agriculture.

TRADE IN OTHER GOODS

The so-called "non-agricultural market access" issue (Nama) is all about manufactured goods, which attract relatively low tariffs in most rich countries.

Chinese car workers
Developing states say they need to keep tariffs on manufactures

They can still be quite high in some developing countries like India, but they say they will only make an offer on this issue when they get some movement on agriculture.

They are also concerned that the planned formula for tariff reductions would force them to make bigger cuts than the rich countries.

Some developing countries, like China, could also gain from this proposal which would make it easier for them to export their manufactured goods to other developing countries.

SERVICES

A key element in the trade talks is the attempt to liberalise trade in services such as telecommunications, shipping, and banking and finance.

Mobile phone user in Africa
Communications could be cheaper with trade reforms, rich countries say

This is the fastest-growing area of trade, and one where the US and the EU are most competitive.

But these talks have stalled, since few countries have made offers to liberalise key service sectors.

They have been put on the backburner at Hong Kong. But several poorer countries now want to rewrite the draft agreement to restrict the right of rich countries to toughen up their requests for liberalisation - while businesses want the EU to get tough, so as to force countries to open some key sectors.

DEVELOPMENT PACKAGE

The EU has introduced a fourth element into the trade talks: a development package, with the explicit aim of gaining some tangible benefits for developing countries.

Bangladesh cotton worker
The US fears cotton imports under the development agenda

The EU wants other countries to adopt its plan for duty-free, tariff-free access to its markets for the world's poorest countries, the 50 least developed countries (LDCs) which together account for less than 1% of world trade.

The package also includes increased "Trade for Aid" which aims to give money to the LDCs to help them improve their trade infrastructure and compensate them for losses as a result of free trade.

The US has problems with some elements of this package, since it would mean that some big textile exporters like Bangladesh would enjoy duty-free access to the US market.

But the US has signalled in principle that it is prepared to accept it, and announced an increase in its own Trade for Aid package.

Some bigger developing countries are also concerned that this plan would give an unfair advantage to the LDCs.


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