CANCUN, Mexico (Reuters) - Riot police sealed off the hotel zone in Mexico's glitzy beach resort of Cancun on Tuesday to control anti-globalization protests on the eve of crucial talks to open markets in a new global trade deal.
As world trade ministers worked on ending a deadlock on key issues like heavy agricultural subsidies in the United States and Europe, about 1,000 political activists protested outside and were blocked off by police in full riot gear.
The police set up 8-foot (2.4-meter) high barriers on the streets, sealing off the main hotel and restaurant district from the town of Cancun, where thousands of activists are staying.
Waving hammer-and-sickle flags of the former Soviet Union and black anarchist flags, the protesters screamed anti-American and anti-Israel slogans but there were no clashes with the 200 riot police deployed.
Inside nearby luxury hotels, trade negotiators from the 146-member World Trade Organization tried to find compromise on the disputes blocking the goal of a comprehensive global trade agreement by the end of next year.
Supachai Panitchpakdi, the WTO's director-general, said failure would deal a serious blow to economic growth and jobs world-wide.
"The weak global economy urgently needs a stimulant that significant further liberalization of world trade can bring. A successful conclusion of the round is thus key to reviving the global economy," he said.
"Failure is not an option. It would send a very damaging signal around the world about prospects for economic recovery and would result in more hardship for workers around the globe, particularly in poorer countries."
The search for a trade deal that opens markets, especially for the world's poor and developing countries, began almost two years ago but most of the deadlines originally set were missed. Officials now hope Cancun will give the talks new impetus.
TROUBLE ON THE FARM
Agriculture is one of the most controversial areas and both the United States and the European Union were clearly on the defensive ahead of the talks.
They spend tens of billions of dollars every year on their own farmers, enabling them to stave off foreign competition at home and export products such as sugar and cotton thanks to the heavy subsidies.
Developing countries say the subsidies cost them billions of dollars in lost trade and that the talks will fail unless the Europeans and Americans cut domestic subsidies, move to end all export subsidies and open up their home markets.
"We face a common enemy and the enemy is the dumped surpluses of subsidized exports from the rich industrialized nations," New Zealand Trade Minister Jim Sutton.
"How do you expect Africa to begin the industrialization process using its agricultural strength if it can't get into these markets? And we have to get into these rich markets because we're too poor to be a market ourselves," said Alec Erwin, South Africa's trade minister.
Pascal Lamy, the EU's trade commissioner, said the importance of agriculture in Europe means it "cannot simply be integrated into world trade like other sectors."
He reiterated that the EU was willing to eliminate some export subsidies, but only those on so-far unspecified goods of special interest to developing countries.
"We are ready to eliminate, change those subsidies which are distortive of world trade. We are ready to eliminate subsidies on product which are of interest to developing countries," he said.
Violent protests exploded at the WTO ministerial meeting in December 1999 so security was tight in Cancun. Activists said around 15,000 people, mainly Mexican peasant farmers, would protest outside the WTO meeting on Wednesday but there were no early indications that the marches would turn violent. (Additional reporting by Richard Waddington and Patrick Lannin)
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