October 25, 1999
Bloomberg News
By Moyette Gibbons

Lausanne, Switzerland, Oct. 25 (Bloomberg) ... Trade and foreign ministers from 25 countries are meeting in Switzerland in a bid to bolster a planned round of global trade talks that could collapse because of disagreements over the agenda.

With five weeks remaining before a Nov. 30 meeting in Seattle aimed at ushering in the talks next year, the U.S., European Union and other World Trade Organization members are divided on key issues ... freer trade in agriculture and textiles, proposals to link trade with labor standards, and taxing Internet commerce, among others.

"It isn't impossible" the WTO could fail to agree on a mandate for the talks in Seattle, said Swiss Economics Minister Pascal Couchepin, who is hosting the two-day meeting in Lausanne. "There will be negotiations on agriculture come what may, but it will be difficult to reach an agreement if discussions are focused on this area alone."

The EU is under pressure from the U.S. and the Cairns Group, a 15-nation farm lobby that includes Brazil and Australia, to slash subsidies to farmers. The EU has budgeted 42.5 billion euros ($45.4 billion) a year for farm support and rural development aid between 2000 and 2006.

"We want to see a substantial reduction in subsidies and the end to safeguard measures in agriculture," said Carlos Simas, Brazil's deputy representative for commercial affairs at the WTO last week.

Brazil

Brazil, the world's largest producer of coffee, sugar and orange juice, relies on agriculture for about 40 percent of its gross domestic product.

The farm lobby is also made up of Argentina, Canada, Chile, Colombia, Fiji, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand, and Uruguay.

The group, named after the coastal resort town in the north of Australia where it first met, negotiated jointly at 1986 world trade talks in Uruguay.

"I hope and I believe that there is enough time (to settle) legitimate differences between now and Seattle," said WTO Director-General Mike Moore.

Moore told ministers at the talks that unless he sees more flexibility in the talks, the Seattle meetings could fail.

Open to Negotiations

EU Trade Commissioner Pascal Lamy said the EU is "open" to negotiations on agriculture, though he reiterated the bloc's call for a broad-based trade round. Key EU concerns include rules on foreign investment, enforcing labor standards and protecting Europe's film, television and music industries.

The WTO is also split over demands by developing countries such as Indonesia, Malaysia and Argentina for improved access to industrialized nations' textile markets. Those countries charge that textiles and clothing exports from emerging economies have shrunk since the end of the Uruguay Round of talks in 1994, instead of expanding as they had been led to expect.

U.S Trade Representative Charlene Barshefsky said today's talks were "constructive," although she said the U.S. isn't prepared to reopen previous accords made under the Uruguay Round.