Ministers from three dozen trading powers met in negotiating alliances on Sunday to prepare for make-or-break talks next week on a new global trade pact, with several difficult farm issues firmly in focus. World Trade Organisation Director-General Pascal Lamy has called the ministers to Geneva to seek a breakthrough in the WTO's 7-year-old Doha round to free up world trade. The various alliances among the WTO's 152 members, from the Cairns group of food exporters to the African, Caribbean and Pacific (ACP) countries met on Sunday to plot their strategy. It quickly became clear that the level of US farm subsidies would be an early bone of contention. US Trade Representative Susan Schwab has said the United States is ready to make “enormous” cuts in US farm support, which developing countries say distorts international trade and squeezes their own farmers out of the market. The latest WTO proposals call for a cut of about 70 percent in US trade-distorting subsidies to $13-16.4 billion. But that figure refers to the ceiling negotiated at the WTO, rather than the actual or applied amount paid out by the government, which is now running at half that level, or about $7 billion, thanks to soaring world food prices. “Those applied numbers of the existing level of US domestic support are one of the numbers that came up in the discussion,” Indonesia's Trade Minister Mari Pangestu said after a meeting of the G-33 group of developing countries. Pangestu said developing countries were keen to see a narrowing of the gap between the US subsidy ceiling and its actual level – known in WTO jargon as “water”. “Reducing the amount of water is the objective,” she told reporters. On Saturday Brazil's Foreign Minister Celso Amorim also dismissed talk of a 70 percent cut in the US ceiling, denouncing double standards and misinformation at the WTO talks. Ministers at the talks, which will focus on the core areas of agriculture and industrial goods, will be watching keenly to see whether Schwab makes a new offer on farm subsidies. On Friday the Senate Agriculture Committee told her it would not back a deal that cuts US farm subsidies more than it opens foreign markets to American farm exports. The new US Farm Bill, which raises support, has led many WTO members to doubt Washington's good faith in the talks. But G-33 members expressed cautious support for the latest proposals to allow developing countries to waive full farm tariff cuts for the sake of food or livelihood security or to deal with sudden import surges or price collapses, although the precise numbers are still to be negotiated. “The main features of the architecture are there and now we have to work forward to get what we want,” the Indian commerce ministry's top civil servant, Gopal Pillai, told reporters. Bananas were also a topic of discussion on Sunday, after the European Union walked out of talks late on Friday saying Latin American countries had refused to sign up to a compromise in their long-running dispute about the fruit brokered by Lamy. Ecuador, the world's top banana exporter, said it wanted to negotiate further, and believed a deal could be reached before the trade talks get under way. Failure to defuse the bananas dispute could derail the entire round, as it would then become part of the farm talks, pitting the Latin Americans against the ACP countries. But Latin American diplomats and EU officials said they were not aware of any further talks planned on bananas on Sunday.
