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France may sink world trade talks

Published Sep. 10, 2005

With hours left to reach a deal, France threatened to doom the World Trade Organization's attempt Tuesday to start a new round of talks to free up global commerce.

Negotiators desperately sought a compromise over farm export subsidies that would keep Paris happy and avoid another collapse like the one the WTO suffered in Seattle two years ago.

But hours before a midnight deadline, after five days of talks among the WTO's 142 members, the French stood firm against demands by other nations to phase out government supports.

Big agricultural exporting countries like Australia, Canada and Argentina, supported by the United States, oppose a subsidy program because they say it lets European farmers export products at below market price, distorting and hurting the world market for farm goods.

Poor countries, many of which depend on agriculture for exports, also were backing the call to eliminate subsidies.

The European Union says it is committed to substantially reducing the subsidies but will not agree to eliminate them entirely.

But within the 15-nation bloc, only Ireland supported France's opposition to phasing out subsidies, officials said.

French Trade Minister Francois Huwart said the issue was "a sort of deal-breaker point."

France, the world's second-biggest agricultural exporter after the United States, has a powerful farm lobby and presidential elections in just six months. The Irish government expects to call an election by next summer.

The EU, which votes as a bloc, appeared to be key to getting a deal at the meeting, which was scheduled to finish Tuesday. Diplomats said completing negotiations would likely take most of the night. Any deal must be approved by all WTO members.

Dutch Trade Minister Gerrit Ybema said the EU could still change its position on export subsidies, but it would need concessions on environmental protection or labor standards.

"We haven't received anything, so we want something," he said.

Differences over agriculture were one of the reasons for the WTO's failure to reach a deal in Seattle two years ago. The collapse of that meeting nearly paralyzed the body that sets rules on international trade.

Director-General Mike Moore has cautioned that another disaster in Doha could lead the more powerful members to pursue regional trade agreements that benefit participants at the expense of others, mainly poorer countries.