Brussels and Washington must urgently strike a deal on farm reform to help unblock global trade talks ahead of an end of year deadline, the head of the World Trade Organisation (WTO) said on Wednesday.
Speaking as US and EU ministers had talks in Washington on the WTO's Doha Round, France's Pascal Lamy said the two transatlantic superpowers must fix what each could do to slash farm subsidies and lower import barriers.
"I think that ... this has become urgent," Lamy told journalists. "We need that they unblock between themselves a certain number of issues."
Lamy, who took over as WTO director-general in September, said Washington should spell out what it could do to cut its subsidies to farmers, while the European Union needed to move on lowering import duties.
"It is necessary that they advance on some issues to allow the rest to be unblocked," he said referring to negotiations in Geneva, which aim to clear the way for a partial global liberalisation deal in Hong Kong in December.
The 148-state WTO complicated its task by failing to strike hoped-for key accords in July, with diplomats blaming a lack of flexibility on the part of Brussels and Washington.
Agriculture is only a small part of the world economy, but a deal there is key to lowering barriers to business in areas ranging from industrial goods to services such as telecommunications and tourism that could give a big boost to global incomes.
On subsidies, the EU says it has done its part with the reform of the Common Agricultural Policy (CAP) and that it is now up to Washington to show what it can do.
This view is widely shared in Geneva, where farm negotiators are meeting this week, but in Washington, politicians say the onus remains on Brussels because it is still the bigger spender.
EU Trade Commissioner Peter Mandelson was meeting his counterpart, US Trade Representative Rob Portman, later on Wednesday with agriculture to figure prominently in their talks.
Although he was hopeful of progress in Washington, Lamy, who sees his trade role as that of "honest broker", said any movement might not become immediately known because both might see a tactical advantage in waiting to reveal their hands.
The former EU trade chief, who admitted he knew how far Brussels could go on lowering farm trade barriers, said both the United States and the EU still had room for manoeuvre.
Lamy, who chaired his first meeting of the round's steering group, the Trade Negotiating Committee (TNC) on Wednesday, said that negotiators in Geneva must focus on a few key issues.
These included a date for ending farm export subsidies, measures to help poor African cotton farmers, barriers to industrial goods, and the question of trade rules, including the use of anti-dumping measures.
"Let us focus on a few issues that will get this train rolling," he said. A final accord must be wrapped up before the end of 2006, or early in 2007, because after that US President George W. Bush may lose his Congressional authority to negotiate trade deals.
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