Agricultural issues are in the spotlight as negotiators try this fall to break a deadlock in world-trade talks, but countries also have to make big trade-offs in manufacturing and services to get an agreement by the end of 2006, experts said.
Countries are trying to gain as much new business as they can for their key export industries while minimising the pain for less competitive or long-sheltered domestic sectors.
Negotiations in the "Doha round" of trade talks "come down to a series of political calculations: what exactly do you need to get and what can you give?" Warren Maruyama, a former US trade negotiator who is now a partner at the Washington law firm Hogan and Hartson, said this week.
As the 148 members of the World Trade Organisation prepare for a key December meeting in Hong Kong, developing countries led by Brazil are determined to get a better farm-trade deal than they did under the world trade pact reached in 1994 under the earlier "Uruguay round" of negotiations.
"We do not want a replay of what happened in the Uruguay round, when developing countries made important concessions in services, in intellectual property (and other areas) and the result in agriculture did not match," said Evandro Didonet, counsellor at Brazil's Embassy in Washington.
That has put intense pressure on the United States and the EU to trim farm subsidies. The EU says it made significant reforms and it is time for the United States to move. Washington argues the EU still far outspends it and says Brussels must make further cuts and also lower its farm-trade barriers.
"The developing countries are not going to come around on market access until they see the European Union has stepped forward," said Jim Grueff, a former US agriculture negotiator. The United States will not cut its subsidies unless others cut their tariffs, he said.
The stand-off over farm trade has blocked progress in the other two key areas of the talks.
One covers manufactured and consumer goods, where the United States and the EU generally have low tariffs but many developing countries have steep protection.
The other area is services, which includes sectors such as banking, insurance, accounting, legal services, energy services and telecommunications, where the United States and the EU have well-established companies eager to move into new markets.
Many developing countries are refusing to seriously discuss opening their services and manufactured-goods markets until there is a breakthrough on agriculture.
"Brazil is fully aware that we must contribute ... but agriculture must move first. We must first have an idea of the ambition that can be achieved in agriculture," Didonet said.
Such "brinkmanship" makes it harder for Washington to offer farm-trade concessions, Meredith Broadbent, a US negotiator, said at a panel discussion last week.
"If we're going to continue to talk about formulas (proposed by Brazil and India) that yield no new market access (for manufactured goods), it makes it very, very difficult for ... the United States to continue to pursue negotiations where we're being asked to consider changes in our ag domestic support programs," Broadbent said.
No one expects the poorest countries to significantly open their markets. But a reluctance by more-advanced developing countries to lower trade barriers has led many in the United States to question whether negotiators made a mistake in calling the current talks a "development" round.
"The problem is the implication that (developing countries) don't have to give. But they do have to give, and one big issue is industrial tariffs," Maruyama said. "They're probably going to have to give on certain ag products" as well.