GENEVA (AFP) - The World Trade Organisation (WTO) proposed that its 147 member countries eliminate subsidies as it sought to broker a compromise in deadlocked global trade talks by the end of the month.
The proposal was contained in a copy of the new draft text of an agreement outlining the way ahead for the troubled negotiations, which was obtained by AFP.
"Members agree to commitments ensuring the parallel elimination of all forms of export subsidies... by a credible end date," the text distributed to the WTO's 147 member states said Friday.
The document put together by chief negotiator Shotaro Oshima, who is also Japan's ambassador at the WTO, marked the first time a compromise has been put forward since a ministerial meeting in Cancun, Mexico collapsed last September.
That opened up a rift between developing countries and wealthy countries over subsidies and trade barriers, with poor countries demanding the elimination of subsidies paid to farmers in the European Union (news - web sites) and the United States.
The draft, which is meant to overcome the deadlock in negotiations a new round of trade liberalisation in several economic sectors, included export subsidies under a list of items "to be eliminated by the end date to be agreed".
Ministers had agreed at a ministerial meeting in Doha, Qatar, in 2001 to reduce "with a view to phasing out, all forms of export subsidies" on agricultural produce as they set out to achieve a new round of trade liberalisation by the end of 2004.
The new draft compromise also proposed that the talks should cover the elimination of the "trade distorting element of export credits and export credit guarantees by reducing the repayment period" to 180 days.
Export credits are notably paid to farmers by the United States and their elimination has been demanded by the EU.
Oshima's proposal also outlined a progressive scale for agricultural tariff cuts, with larger cuts on high tariffs.
The United States has been asking that the agreement opens the way for talks on specific import tariffs cuts, while the EU and a group of agricultural net importers, which includes Japan, have been insisting on a formula that was less severe on higher rates.
Member states must now examine the draft and maybe revise before an end-July meeting which holds the key for progress on the Doha round of trade talks.
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