MONTREAL (CP) - The United States and Europe need to make rapid, substantial progress on farm subsidies and other agriculture issues to keep negotiations for a global trade treaty on track, Canada's trade minister said Wednesday.
However, chief negotiators for both the United States and Europe left a World Trade Organization meeting boasting of their own efforts at compromise and challenging the other side to be more flexible.
International Trade Minister Pierre Pettigrew credited the WTO's two most powerful players with bringing new ideas to the table this week in an attempt to break through roadblocks on agriculture that have threatened to derail more than 18 months of negotiations on a wide range of trade issues.
The Europeans have proposed reducing domestic farm support by 60 per cent, while the United States has said it will work to completely eliminate its export subsidies.
"The last few days have been a useful reality check," Pettigrew told a news conference at the end of the three-day meeting.
"However, significant gaps remain."
Pettigrew said the meeting succeeded in tightening the WTO's focus and identifying areas where more compromise is needed heading into a crucial meeting of the entire WTO Sept. 10-14 in Cancun, Mexico.
The Cancun meeting is the halfway point on the road to reaching a deal to open up international commerce by a deadline of Jan. 1, 2005. The mandate for negotiations on everything from agriculture to dispute resolution to access to drugs was agreed to in November 2001 in Doha, Qatar, and the talks have become known as the Doha Development Agenda.
Pettigrew cautioned time is tight.
"The degree of ambition concerning agriculture will be a deciding factor for the results of this negotiation," said Pettigrew. "Lots of ambition on agriculture will open doors in other sectors."
Canada and developing countries are among those calling for the elimination of about $300 billion US in annual farm subsidies they say depress international prices and limit their access to foreign markets. But there are also calls for a reduction of domestic support and improved market access.
U.S. trade representative Robert Zoellick said his country has called for a total elimination of export subsidies in agriculture, a $100-billion US reduction in domestic subsidies and a drastic reduction in tariffs.
"The United States has tried to move forward aggressive proposals in both agriculture and goods," Zoellick said Wednesday.
"We believe if everybody opens their markets it benefits everyone. We know it's not politically easy but we believe that has to be the combination that works to move the system forward."
Zoellick said Europe must be more dedicated to eliminating its export subsidies.
But EU trade commissioner Pascal Lamy said Europe is making key concessions in other areas, such as its domestic subsidies and a commitment to give duty-free access to developing countries, who have complained about an uneven playing field.
He called on the United States to match its efforts with respect to domestic subsidies.
Lamy said he believes the Montreal meetings will motivate European and American negotiators to make further progress at meetings to be held in Geneva in the coming weeks.
"My sense is that some defrosting is happening," said Lamy. "But we're not yet to the sort of global warming drive which we'll need in Cancun to make it a success."
Developing countries, which dominate the WTO's 146-country membership, are carefully watching progress between the EU and the United States on agricultural issues. They insist those issues must be adequately addressed before they will agree to focus on the non-agricultural issues of concern to richer nations.
Maria Soledad Alvear, foreign affairs minister in Chile, left Montreal satisfied with the renewed commitment by the United States and Europe to work on the thorny agriculture issues.
"There is a willingness to make progress in that direction and we value very much that flexibility," Soledad Alvear said through a Spanish interpreter.
Canadian farmers, however, urged caution.
"A good deal is better than a quick deal," Bob Friesen, president of the Canadian Federation of Agriculture, said in a phone interview from Toronto.
"If it takes time, let's take time."
For example, he said Canadian farmers fear Europe is simply reforming the way it distributes its domestic support, rather than reducing it as the negotiators have suggested.
Outside the downtown hotel where the meetings took place, the streets were much quieter Wednesday compared with the boisterous protests of Monday and Tuesday.
More than 230 people were arrested Monday following a noisy protest through the downtown streets that ended with the vandalism of some stores, restaurants and luxury vehicles.
Two demonstrations on Tuesday were smaller and more peaceful and the activists wrapped up five days of events Wednesday with an "anti-capitalist carnival" in a park several blocks away from the downtown core.
The protesters, who claim the WTO is too secretive and concerned with profit at the expense of the world's poorest citizens, promise to return to Cancun to disrupt the next WTO meetings.
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