CANCUN, Mexico - Negotiators reported signs of movement yesterday on the crucial issue of agricultural subsidies as talks on freer worldwide trade entered a critical phase.
The 146 member states of the World Trade Organization are scheduled to end their negotiating session in this beach resort tomorrow with the outline of a deal to cut barriers to trade.
Deep divisions among countries that have stymied progress so far showed signs yesterday of lessening, said Pierre Pettigrew, the Minister for International Trade.
"There's definitely been movement on agriculture," he said. "There is a definite intensification of the negotiations."
Added Franz Fischler, the European Union agriculture commissioner: "We have left useless procedural discussions behind and are engaging in serious discussions on substance."
Both the United States and Brazil, the leader of a bloc of developing countries, softened their criticism of each other. The U.S. also made an offer to the European Union, its traditional sparring partner on trade issues, that would protect both of them from challenges to some of their subsidy policies.
George Yao, Singapore's trade minister, was working on a compromise proposal to be presented to countries today.
The Brazil-led bloc, christened the G21, includes China and India and is pressing for deep cuts to U.S. and European farm subsidies. Worldwide, those subsidies total US$300-billion a year. The Canadian government supports that position but not the group's hard line on maintaining limited access to its own markets.
"We need to do away with the weapons of mass trade destruction. We need to destroy this arsenal," said Sergio Marchi, Canada's WTO ambassador. "[But] you can't have every developing country closed to market access."
"The whole planet is watching what we are doing here for farmers and poor people around the world," Mr. Pettigrew warned.
The trade minister said talks are still testy but that is to be expected when negotiations get serious.
"World trade negotiations are not the time to be sending flowers. There are quite a few flower pots that are flying around the planet right now," he said.
Lyle Vanclief, the Agriculture Minister, was less optimistic on the chances of a deal, saying only "it is unclear at this point whether we'll be able to close the considerable gap that exists."
Brazil is willing to compromise to get a deal, and believes the U.S. has indicated similar flexibility, but is waiting for a signal from the Europeans, a Brazilian official said on condition of anonymity.
On the record, though, Brazil issued a news release calling on the EU and the U.S. to stop trying to pick apart its coalition by offering special deals to smaller members.
"It is even more important at this stage that we concentrate our efforts in trying to negotiate and not direct our energies at attacking countries or groups of countries."
Reducing agricultural subsidies and lowering border taxes to increase market access are the linchpin issues of these talks, which are intended to provide a final agreement by the end of 2004.
Other issues are taking a backseat until negotiators see how much progress can be made on the toughest topic of agriculture , although Mr. Pettigrew is continuing to push for progress on an investment accord.
He said there have been signs of movement on the question of whether to include investment and other side topics in the WTO negotiations. He is chairing the group exploring that issue, which is being pushed by the EU and Japan and opposed by most developing countries.
"There has been a hardening of positions on both ends. At the same time... I have noticed signs of movement from a number of countries, " he said.
Veteran trade observers expect negotiators to work 24 hours a day until the meeting closes.
ijack@nationalpost.com
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