Thursday, December 15 2005 11:51 Hrs (IST) - World Time -

Hong Kong: Deadlock continued at the sixth WTO Ministerial yesterday (Dec 14, 2005) as closed door negotiations got underway for the second day with both developed and developing countries refusing to budge from their respective positions on the contentious issue of agriculture subsidies.

At the crucial second day of 'Green Room' meetings there seemed no breakthrough as negotiators from select countries out of the membership of 149 engaged on agriculture.

Green room meetings which are closed door are held among select group of countries, basically a broad representation of the WTO membership in presence of Director General and sector specific facilitators.

While on Tuesday the meetings focused on the LDC package, yesterday's meeting is focusing on agriculture as it is the main sticking point in the global trade negotiations preventing any progress.

Earlier during the day, EU and US and developing countries, including India, failed to inch forward on farm export subsidies as also the Least Developed Countries package with Indian Commerce Minister Kamal Nath making it clear that global trade should made for fair for all.

"Talks have not moved forward as there has been no movement in agriculture which is the make or break issue in WTO talks. While US has indicated that it is ready to eliminate all export subsidies by 2010, it is to be seen what they is their criterion of their farm export support," Nath said.

Elaborating, Nath said developing countries want all kinds of export subsidies, including exports credits, food aid and State Trading enterprise listed under the July Framework to go by 2010 adding that EU is yet to indicate any end date.

While the G-20 proposes that the highest agricultural tariffs be cut by 75 per cent, while an ambitious proposal by the US demands 90 per cent. The EU has proposed a 60 per cent cut in the highest tariffs and cap of 100 per cent.

On subsidies US has proposed a cut of 75 per cent for EU while 55 per cent for it self, while EU is for 70 per cent reduction and tightening of Blue Box (farm subsidies which are considered not so trade distorting).

G-20 on the other hand wants developed countries to cut 70-80 per cent of their trade distorting support. Nath also said there had been no movement on the quota-free and duty free market access LDC package as US was still not ready for it.

EU which has strongly objected to US food aid programme is pushing hard for this package as also cotton subsidies in US preventing movement in the crucial area of agriculture.

Nath said if the blame of the failure of deadlock came to developing countries, including India, the country would accept it. "We are not looking to shirk any blame. Trade should not just be free but also fair."

Conceding that the negotiations here could not achieve everything, US proposed setting up another deadline to break the deadlock to complete the round by 2006 while making it clear that "only way to break the deadlock required convergence on market access in agriculture."