World trade talks inch toward compromise deal

By Sophie Walker and John Ruwitch

HONG KONG (Reuters) – Weary trade ministers inched toward a
compromise deal curbing rich nations’ farm subsidies on Sunday
as anti-globalization protesters marched again in Hong Kong, a
day after violent clashes with riot police.

As the World Trade Organization (WTO) meeting staggered
into its last day, the United States went some way toward
meeting the concerns of African cotton producers and a package
for the world’s poorest countries appeared to be falling into
place.

But it was unclear whether Europe’s offer on ending its
export subsidies would be enough to satisfy big agricultural
producing countries like Brazil, which have demanded a cut-off
date of 2010.

“Everything is pretty much okay, but there is still a
question mark over subsidies,” one senior trade diplomat said.

Diplomats say that without agreement on sticking points in
Hong Kong, a long-elusive pact to free up global business in
farm and industrial goods and services could be killed off,
throwing the very standing of the world trade body into doubt.

On Saturday, Hong Kong police fought running street battles
and fired volleys of tear gas to repel hundreds of mainly South
Korean protesters trying to force their way into the
harbor-side convention center where the trade ministers were
meeting.

Undeterred, more than 1,000 demonstrators began another
march against free trade on Sunday afternoon.

The government said 114 people were injured in Saturday’s
fighting, including 39 police officers. Nine hundred people
were arrested, many of them South Korean farmers who say the
WTO is driving them out of business.

However, the fighting was less intense than the “Battle of
Seattle” in 1999 when protesters succeeded in delaying the
start of a WTO ministerial conference that had initially been
intended to launch a new round of trade negotiations.

The current trade round was started in Doha in late 2001 in
a bid to calm a jittery world economy after the September 11
attacks on New York and Washington.

It was sold to developing countries as a way to lift them
out of poverty, but many of them complain that rich nations are
clinging to decades-old protection of their agricultural
markets.

“SLEEP IS OVERRATED”

Those rich nation-poor nation tensions have plagued the
Hong Kong talks all week, and came to a head in fractious
negotiations that went through the night and ended on Sunday
morning.

Indian Trade Minister Kamal Nath emerged from those talks
saying that there had been enough consensus for a deal.

But, minutes later, the EU said there was no agreement.

“We made the moves that were expected of us but the
goalposts moved at the last moment … others have put a
barrier in the way,” said European Commission spokesman Peter
Power.

Diplomats said the EU had offered a cut-off date of 2013
for farm export subsidies despite pressure from developing
countries and the United States for the earlier date of 2010.

“There was agreement from the vast majority of members for
2013 — but then Brazil said ‘no’,” said one.

Export subsidies have become an emblematic issue for
developing countries at the ministerial conference. Brazil says
ending them would send a clear signal of rich nations’
willingness to reach an overall pact that benefits the poor.

EU subsidies are currently worth about 2.7 billion euros a
year, a small part of the 25-nation bloc’s annual spending of
more than 40 billion euros ($47.9 billion) on agriculture.

The EU said on Sunday it could begin a limited phase-out
before 2013, but it would not be substantial. It was not
immediately clear whether that would placate developing
nations.

U.S. Trade Representative Rob Portman remained hopeful.

“I’ve learned that sleep is overrated. We’re getting less
and less every night and none last night,” he told reporters.
“But it was worth it. We made some progress. So I’m still
encouraged. There’s more time left.”

The United States said it had proposed cutting its domestic
support for cotton production more ambitiously and more rapidly
than for other commodities.

A senior U.S. trade official said that, in response,
cotton-producing countries in West and Central Africa — which
say U.S. subsidies are savaging their economies — were likely
to drop requests for specific cuts.

Diplomats said a plan to give the poorest nations
tariff-free and quota-free access to the markets of the world’s
biggest economies was now likely to be slightly less sweeping,
making it easier for the United States to accept.

($1=.8355 Euro)

(Additional reporting by William Schomberg, Richard
Waddington and Chris Buckley)