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India, France lead opposition to WTO trade round

India and France threw up road blocks to the launch of new world trade talks on Tuesday, dismissing a proposed agenda as unacceptable as a midnight deadline neared for trade ministers meeting in Qatar.

French Trade Minister Francois Huwart said no agreement could be reached at the World Trade Organisation meeting if its final text included calls for an end to farm export subsidies.

France has been the most vocal opponent within the 15-member European Union of a proposal that farm export subsidies should be reduced with a view to phasing them out.

"The wording about phasing out is not acceptable for the European Union…. is not acceptable to France," Huwart told reporters. "We must try to find another wording. Really it is a deal-breaking point."

Huwart put the chances of success at 50-50.

Indian Commerce Minister Murasoli Maran, whose country has championed developing world rights at the Doha meeting, voiced "strong disappointment" with a draft agreement circulated to ministers.

"The text has failed to reflect India's concerns and demands in a substantial manner," he said in a statement. India wants greater access to Western markets for its textile exports.

The objections looked set to force WTO officials to rework their draft and seek compromises for the rest of the day. Some ministers said the midnight deadline was likely to slip.

"The latest draft is a development in the wrong direction as far as the European Union is concerned," Finnish Trade Minister Kimmo Sasi said. "I'm still optimistic, but I think we have to use the whole night."

Failure to achieve a compromise would bring down the delicate house of cards constructed to meet the competing demands of rich and poor nations and the domestic political needs of individual countries.

It would mean a second straight failure for the WTO after the collapse of talks in Seattle two years ago -- a spectre that has motivated delegates in Doha to reach a pact, along with a desire to give a psychological boost to the global economy.

TWO KEY AREAS

The draft agreement called for the opening of a "work programme" on a range of issues designed to price open global markets. It effectively narrowed down dispute to the two key areas of farming and textiles.

In agriculture, the EU, particularly France, has found itself isolated against the rest of the world's demand that it commit to abolish the huge export subsidies it pays its politically powerful farmers.

The United States and Canada, meanwhile, have been at loggerheads with developing nations led by India, Pakistan and Bangladesh over calls for rich countries to open their markets more quickly to textile products.

One bright point has been a tentative agreement, confirmed in the draft, on a separate pact that would ease the way for poor countries ravaged by public health crises like AIDS and malaria to produce or buy cheaper generic drugs.

WTO ministers have been meeting under high security, cordoned off in a luxury hotel on the Gulf shore guarded by armed soldiers and US marines standing ready in ships at sea.

TALKS WOULD START NEXT YEAR

The draft agreement called for the talks to start next year, probably by the end of January.

It proposed negotiations on liberalising industrial tariffs and on ensuring transparency in government procurement.

It also sought to meet demands for help by poor countries by setting up special WTO groups to look at issues of debt and finance and trade-related aspects of the transfer of technology.

But differences remained over agriculture and textiles.

The EU has agreed to negotiate the reduction of agriculture export subsidies but has remained adamant that it will not accept a call for their eventual abolition.

The Organisation for Economic Co-operation and Development estimates that total EU support for agricultural producers amounted to $90.23 billion in 2000 compared with $59.89 billion in Japan and $48.96 billion in the United States.

The EU's Common Agricultural Policy remains a cornerstone of the EU's drive for economic and political integration and any move to weaken it would stir up a hornet's nest in France, which holds presidential and legislative elections next year.

On textiles, Delhi has taken a particularly hard line in demanding that rich countries open up their markets to more of its clothing output -- a vital currency earner for India and other developing economies.

Officials said the United States had met Indian officials to try to solve the problem but had not succeeded.

India has threatened to block overall agreement without some acceleration of the current schedule of increasing textile import quotas. The United States says this is a bilateral issue that cannot be agreed under US law at Doha.

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