Time running out for WTO farms deal

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Negotiations aimed at freeing up global trade were in danger of running into the sand at the Mexican resort of Cancun yesterday as the world's richest and poorest countries dug their heels in over their respective positions on agriculture.

Officials from the UK, the European Union, the United States and the World Trade Organisation warned that time was running out to strike a meaningful deal ahead of tomorrow night's deadline when ministers from the 146 countries pack their bags.

"It is a hell of lot to resolve," said a senior British trade official. "It is hard to see this falling into place very easily over the weekend."

The talks were deadlocked over the heated issue of agriculture and demands by a new powerful coalition of poorer countries, the Group of 21 (G21) - which includes China, Brazil and India - calling on the US, EU and Japan to slash farm subsidies and open up their markets to competition.

The EU and US insisted they had already made generous offers and accused some of the developing countries of refusing to spell out what offers they would make in exchange.

The chairman of the WTO's agriculture negotiations, Singapore's Trade and Industry Minister, Brigadier General George Yeo, is expected to produce a new text on a farm deal today, which will leave 48 hours to wrap up a deal on agriculture, cutting industrial tariffs and opening up markets of rich and poor countries. "It clearly would appear to be very tight," said a UK farming official.

Margaret Beckett, the Secretary of State for Environment, Food and Rural Affairs, welcomed the emergence of the G21 as a voice for developing countries. "This is an important step forward but it is also crucially important that we very soon begin real negotiations. There is only limited time and we must do more than merely exchange positions," she said.

Franz Fischler, the EU's agriculture commissioner, said the G21 needed to show what trade obstacles within the developing world they were prepared to address. "We have shown flexibility, we are showing flexibility and we will show flexibility but there are limits," he said.

Pressure groups have praised the emergence of the G21 as a voice of developing countries and have urged them to stand firm, despite allegations of arm-twisting by the US and EU. But Digby Jones, head of the CBI who is part of the UK team, said: "If they think they can push the US to the wire they are playing with fire."

Christian Aid yesterday claimed to have secured a major concession from Patricia Hewitt, after it flew the British Trade and Industry Secretary to Honduras to visit rice farmers ahead of her arrival in Cancun.

After the visit she said: "We need to agree that a country like Honduras can take special measures to protect rice farmers so they can sell their rice."

Honduran farmers told her they were being forced to give up farming because of subsidised rice from the US.