Talks in Europe last-ditch effort to salvage WTO round: US

WASHINGTON (AFP) - The United States said talks next week among five key players in the World Trade Organisation would prove crucial to success or failure at a WTO meeting in Hong Kong next month.

Trade chiefs from Australia, Brazil, the European Union, India and the United States are scheduled to meet in London next Monday and then at WTO headquarters in Geneva over the following two days, US officials said.

"If we can't pull it together next week I think it's very difficult" to craft a deal on the entire Doha round of trade talks "in time for Hong Kong", US Trade Representative Rob Portman said.

"The clock is ticking," he told the agriculture committee of the US House of Representatives at a special hearing on the Doha round. "This is an opportunity we should not let pass."

The 148 WTO members are trying to craft a comprehensive agreement to tear down global trade barriers in time for the ministerial meeting in Hong Kong on December 13-18.

Agriculture has emerged as the key stumbling block. The EU is under intense pressure to go further to bring down its tariffs and subsidies, but is riven by internal discord with France angrily resisting further reform.

Portman said the fate of the Doha round "hangs in the balance because of the lack of progress in agriculture, where much of the responsibility lies with the European Union".

He warned that "without very quick progress on this issue, the outcome of the ministerial meeting, and the entire Doha round, may be at risk".

Agriculture Secretary Mike Johanns also underlined the importance of next week's meetings among the big five trading powers in his own comments to the House committee.

"If we don't see this thing coming together by next week, we start to run out of time," he said.

"It can happen, but it will require a really diligent effort by all partners, and it will require a better offer (on agriculture) from the EU."

The WTO aims to start drafting documents for the Hong Kong meeting by mid-November.

Although all members must approve the deal, an agreement by the five trading powers is seen as crucial because they epitomize many of the diverging interests at the WTO.

Both the senior US officials said they would continue their campaign at the WTO if there is no breakthrough next week.

"We're not going to give up. We're going to do everything we can to bring it to a successful conclusion," Johanns said.

Under pressure from other trading heavyweights, the EU last week offered to slash import duties on farm produce in a range of 35 to 60 percent. Its previous proposal had called for cuts ranging from 20 to 50 percent.

The United States quickly deemed the offer inadequate, a position echoed Monday by the Cairns Group of 17 major food exporters, notably Australia, Brazil, Canada and South Africa.

The United States is particularly angry at the high number of farm products that the EU wants to see labelled "sensitive" and thus exempt from deeper tariff cuts.

The EU proposal would reserve that designation to eight percent of all its farm produce. The United States, backed by the Group of 20 developing nations, wants that figure brought down to one percent for developed countries.

"Frankly, the EU's proposal does not meet the mandate of Doha, and we look to the EU to come forward with a stronger market access offer," Portman told the committee hearing.

Both Portman and Johanns underlined that the United States needs a WTO deal in good time before mid-2007, when a new US farm bill will come up for debate in Congress and President George W. Bush's "trade promotion authority" expires.