EU and US attempt agreements to revive stalled WTO talks

Though European Union and US leaders have agreed to seek a fresh approach to resolving differences over the stalled global trade talks, they continue to expect the other side to be more accommodative.

Disagreement over agriculture, between the US, the EU and the developing countries led by India and Brazil, caused the Doha talks to be suspended in Geneva last year.

While the US is unwilling to end its own agricultural subsidies and the EU is unwilling to reduce import tariffs, both want the developing countries to increase market access to agricultural exports from the US and EU countries.

Moreover, the EU and US remain locked in dispute over agricultural subsidies and import tariffs among themselves.

EU commissioner Peter Mandelson has urged president Bush to push for a trade saying the negotiations between the US and EU were on a "knife edge".

According to the EU, US inflexibility is responsible for the breakdown between the two sides, while the US says Europe has failed to open up its markets.

Both sides are, however, under pressure to reach a deal since president Bush's special "fast-track" authority to negotiate US trade deals expires on 30 June this year, giving the US Congress the right to change such agreements.

US and EU negotiators realise that a deal must be finalised by end February or early March for the paper work to move through the US and EU bureaucracies to be signed in time before Bush's fast track powers lapse.

Democrats, who now control the US Congress, are unlikely to extend the president's fast track powers.

Making a virtue of necessity, president Bush said that both the US and the EU recognised that "the best way to help impoverished nations is to complete this Doha round to encourage the spread of wealth and opportunity through open and reasonable and fair trade".

European Commission president Jose Manuel Barroso has described talks with president George W Bush as a "defining moment" for the Doha trade round and said negotiators had been told to produce a solution to the impasse "as soon as possible".

Mandelson plans to push for the US to cut the $20-billion subsidies to American farmers and in exchange the EU was prepared to offer further reductions in its tariffs.

The Washington meeting comes as South East Asian leaders gather in the resort island of Cebu in the Philippines from 10 January for the second round of their postponed annual summit, where they will sign trade and energy agreements and discuss counter terrorism.