- The Washington Times - Tuesday, March 25, 2003

Trade negotiators from 145 countries convene in Geneva this week with little hope of reaching a consensus or meeting an end-of-month deadline for critical agricultural-trade rules.

The World Trade Organization talks on agriculture, which pick up informally todaytue, are a central component of ongoing talks on updating rules that govern international economic relationships.

"A lot of countries see this as an essential part of the round. If there is no progress on agriculture, they see no reason for the rest of the issues. Agriculture is at the core of the round," said a U.S. trade official, who spoke on the condition of anonymity.

The official said the Bush administration would like to meet the Monday deadline, but the situation is difficult because Europe does not want to make meaningful changes.

U.S. and European officials have downplayed the effect of ongoing trade disputes and the war with Iraq on the talks, but others say the world political situation is souring negotiations.

"Normally, I would have said that foreign policy and trade policy are pretty well segregated by U.S. policy-makers and in the WTO. Unfortunately, right now, I think that trade policy is being influenced by foreign policy," said Craig Thorn, a partner at the Washington consulting firm DTB Associates, which closely monitors WTO agricultural negotiations.

"I hope it doesn't last. It's not a healthy situation," he said.

With no agreement on an outline for further agricultural talks, the task of setting a framework for negotiations probably will be pushed back, possibly as far as a high-level meeting set for September in Cancun, Mexico.

Countries have watched deadlines pass on other sensitive issues, such as granting poor countries access to generic drugs, despite warnings that the Cancun agenda would end up overloaded and the goal of new trade rules by 2005 would be jeopardized.

The United States, with countries such as Australia and Argentina, and the 15-nation European Union, with support from Japan and other countries, would have to overcome wide differences to reach an agreement on agriculture.

The U.S. camp generally wants more significant trade liberalization, especially subsidy cuts, while the European side wants to maintain more extensive support systems.

The WTO has floated two proposals for new rules governing subsidies, tariffs and other supports. The most recent came out last week and was immediately criticized by leaders from the European Union, Japan, Australia and other nations.

"There are people very close to the negotiations who are wondering if the differences can be bridged. Looking at the last set of negotiations, the differences were even larger, but — though it took a long time — they finally got around to it," Mr. Thorn said.

The last major round of world trade talks ran from 1986 to 1994. The current round began in November 2001 and is scheduled to finish by 2005.

The United States, European Union and other WTO members are haggling over more than $310 billion in government support paid to farmers, or used in marketing, research and infrastructure, according to Organization for Economic Cooperation and Development estimates.

The European Union, Japan and the United States collectively account for about four-fifths of all support, but as a percentage of gross farm receipts, levels in Switzerland, Norway, South Korea, Iceland and Japan are highest.

Consumers and taxpayers pay for the support.

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