US bid to relaunch world trade talks

Published January 13, 2004

WASHINGTON, Jan 12: The United States, detailing a surprise bid to relaunch stalled world trade talks, warned the European Union on Monday it must accept an end to farm export subsidies as the price of success.

In letters to the World Trade Organisation's (WTO) 146 member states and senior trade officials, US Trade Representative Robert Zoellick said such subsidies, of which the EU is the biggest user, were the greatest barrier to progress in the trade negotiations.

"I believe that we will not be able to solve the puzzle (of the talks)... unless we have an agreement to eliminate export subsidies by a certain date," he said in the letter, a copy of which was obtained by Reuters.

The call, which may undermine a common front that Washington and Brussels have shown in the troubled trade talks, came as the EU and other WTO members prepared to ask the Geneva body for the go-ahead to levy sanctions on the United States in a long-running, separate trade row.

World trade talks have floundered since September when a WTO ministers' meeting collapsed, partly due to deep divisions over agriculture. The World Bank says success would give a huge boost to the global economy.

Neither the United States nor the EU, which both blamed developing countries such as Brazil and India for the ministerial failure, had shown much interest in reviving them.

Zoellick, from an administration increasingly seen as distracted by November's presidential election, sought to step up the pressure for progress by urging the WTO to agree a mid-year deadline for some basic accords.

The so-called Doha Round, launched in the Qatari capital in late 2001 and which aims to lower barriers to business across the global economy, was due to be wrapped up by the end of this year. But few trade observers believe that can be done.

There was no immediate reaction from the European Union and other WTO member states, but a spokesman for WTO chief Supachai Panitchpakdi welcomed the letter.-Reuters