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Last Updated: Sunday, 18 December 2005, 18:13 GMT
'Modest' deal struck in Hong Kong
EU Trade Commissioner Peter Mandelson
Peter Mandelson said the deal was "acceptable"
A limited trade deal has been reached in Hong Kong after developing countries approved a European Union offer to end farm export subsidies by 2013.

India and Brazil welcomed the deal - ratified after six days of talks - which will end subsidies by 2013, while the EU said it was "acceptable".

They hope it will pave the way for a global free trade treaty in 2006.

Yet only modest progress was made in other key areas, and officials admitted much more work needed to be done.

Fresh urgency

Pascal Lamy, director-general of the World Trade Organization, said the agreement had put efforts to secure a global trade treaty by the end of next year "back on track".

"You gave it a new sense of urgency," Mr Lamy told delegates.

EU and US officials gave the deal a more guarded welcome, however.

MAIN POINTS OF THE DEAL
Agricultural subsidies: Farm export subsidies will progressively be phased out by 2013. However, there has been no agreement on import tariffs
Cotton: Rich countries will phase out export subsidies for cotton, but there is no agreement on a date for reducing domestic subsidies for US farmers
Development Aid: The poorest countries will get quota-free and duty-free access to global markets for 97% of their goods

"In a week of disappointments, it (the agreement) is no small prize," said EU Trade Commissioner Peter Mandelson.

"It is not enough to make this meeting a true success but it is enough to save it from failure."

Rob Portman, US Trade Representative said there was "a lot more work to do in agriculture and market access".

At the end of six days of talks, significant obstacles remain in the way of a comprehensive global trade agreement.

The WTO will hold further talks on issues such as reducing import tariffs on agricultural produce and freeing up trade in industrialised goods after making no headway.

Unresolved issues

The US is resisting pressure to rapidly reduce the subsidies it gives to domestic cotton farmers, a source of great concern for African countries.

BBC economics editor Evan Davis said the toughest trade issues remained unresolved at the end of the meeting.

Sunday's deal followed heated round-the-clock negotiations between the US, European Union and developing countries.

This is a profoundly disappointing text and a betrayal of development promises by rich countries whose interests have prevailed yet again
Phil Bloomer, Oxfam

Poorer countries pushed hard for an end-date of 2010, so the agreement, which will see some but not all subsidies eliminated by then, represents a compromise.

"This was a modest but not insignificant deal which could be a driving force to make real cuts in agricultural subsidies," said Celso Amorim, Brazil's foreign minister, speaking on behalf of the G20 grouping of leading developing nations.

Progress in any area is contingent on countries agreeing a comprehensive global trade agreement by the end of 2006.

Avoiding failure

EU ministers were more cautious about the agreement.

"The British government was disappointed that the meeting did not make more progress but relieved it did not end in failure like Cancun and Seattle," said Alan Johnson, UK Trade and Industry Secretary.

Riot police seal off the talks venue

The WTO urged members to "act decisively and with real urgency" to create a freer and fairer global trading system.

Cuba and Venezuela expressed reservations about the agreement, objecting to the potential future liberalisation of services industries such as banking, insurance and tourism.

'Missed opportunity'

The deal includes a commitment to help the world's poorest countries develop their trade by eliminating export duties and quotas.

However, development groups said the meeting was a missed opportunity to tackle one of the root causes of poverty in developing countries.

"This is a profoundly disappointing text and a betrayal of development promises by rich countries whose interests have prevailed yet again," said Oxfam's Phil Bloomer.

The final day of the WTO meeting was held against a backdrop of continuing violence.

There was a large police presence around the venue after clashes between police and demonstrators on Saturday, which left 70 people injured.




BBC NEWS: VIDEO AND AUDIO
See protesters clashing with police in Hong Kong



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