Page last updated at 00:07 GMT, Sunday, 27 July 2008 01:07 UK

Concerns over proposed trade deal

EU trade negotiator Peter Mandelson at WTO talks
Peter Mandelson said he was "moderately encouraged"

Some European Union countries have expressed concerns over proposed concessions made by trade negotiator Peter Mandelson at talks in Geneva.

The discussions are trying to save the Doha round of talks, begun in 2001, intended to liberalise world trade.

But senior politicians from Italy, France and Ireland are worried about moves which would force them to cut subsidies to their farmers.

Mr Mandelson insisted that the emerging deal could not be undone.

The talks are due to continue until Wednesday.

But the fear is that even if a deal finally emerges, it won't be in keeping with Doha's original purpose - a trade agreement that will genuinely boost economies in the developing world, reports the BBC's Imogen Foulkes in Geneva.

An 'emerging' deal

After four days of deadlock, a compromise emerged on Friday, which is now being reviewed by ministers from some 35 countries.

Brazilian Foreign Minister Celso Amorim
Everybody there was speaking about services and trying to be as positive as each one can be
Brazilian Foreign Minister Celso Amorim

The proposed settlement, brokered by Pascal Lamy, the head of the World Trade Organization, calls for cutting limits of European farm subsidies by 80% and US payments by 70% to about $14.5bn.

However, this would not mean the US would have to cut its actual spending on support to farmers, which totalled about $9bn last year.

The compromise proposal also involves cuts in tariffs on agricultural imports and on industrial goods.

In another area of contention, Mr Mandelson said the EU would offer 80,000 temporary visas a year for working in the services sector.

And US Trade Representative Susan Schwab said the US would extend the number of sectors open to foreign workers.

Such moves were welcomed by developing countries, such as India.

"These are constructive signs," said Indian Commerce Minister Kamal Nath. "There is good movement by the United States and EU... the process of engagement is continuing."

And Brazil's foreign minister said there had been a "good atmosphere".

"Everybody there was speaking about services and trying to be as positive as each one can be without any attempt to spoil the game," said Celso Amorim.

Caution in Europe

But Italian Prime Minister Silvio Berlusconi said he and French President Nicolas Sarkozy had "deep concern" about the plan.

Following a telephone discussion, the two leaders stressed "the absolute necessity for Europe of a positive and balanced result which offers European citizens benefits in regard to the sacrifices" which might be required.

"We have a couple of issues and one, of course, is agriculture," said Irish Deputy Prime Minister Mary Coughlan.

"And we don't see the balance in Nama (non-agricultural market access)."

But European Agriculture Commissioner Mariann Fischer Boel said: "A huge majority of member states supported the Commission... on the basis of the paper on the table, to continue negotiations."

And Mr Mandelson stressed again that the core principles of the proposed deal must stand and said he was "moderately encouraged" by the talks on Saturday.

"I heard some interesting signals from India, [a] couple of things from China, one in particular that I want to specify, to follow up," he added.




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