US meetings on trade lift hopes of new subsidy cuts

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The chief US negotiator on world trade flies into Geneva today for meetings with the World Trade Organisation and leading developing countries, fanning hopes it will make a new offer to cut farm subsidies.

Rob Portman, who is due to take up another Washington post, and his expected successor Susan Schwab will meet some of the most vocal critics of the US and European stance on trade.

However Peter Mandelson, the European trade commissioner, has no plans to visit Geneva, lowering hopes of an informal meeting to seek a breakthrough.

A ministerial meeting scheduled to take place yesterday in Geneva was cancelled last week after it emerged the main players were still miles apart on the key issues. Instead Mr Portman arrives in Geneva tonight ahead of meetings tomorrow and Wednesday.

Tomorrow he meets the WTO director general, Pascal Lamy, the Brazilian finance minister, Celso Amorim, Mark Vaile, the Australian trade minister, Shoichi Nakagawa, Japan's trade minister and the Cairns group of southern hemisphere agricultural exporters. On Wednesday he meets the African Group, the Least Developed Countries, the Group of Latin American and Caribbean Countries and the chairs of the main negotiating committees.

Last week Mr Portman said he did not rule out making deeper cuts in farm subsidies, but said any move depended on other parties such as the EU offering more access.

Mr Mandelson, who earlier in the month used a keynote speech to attack the US stance, welcomed Mr Portman's move but reiterated that any fresh EU offer depended on other countries moving first. A spokesman said the commissioner would go to Brussels if Mr Lamy was confident enough to call a ministerial meeting. Mr Lamy's spokesman said that would "definitely not" happen.

Ambassadors from the 149 WTO member countries are increasingly concerned that the talks are headed for failure. Don Stephenson, chair of the committee negotiating tariffs on industrial goods, said there had been "no progress" on the core issues "Members refused to engage in a substantive manner on these issues and, in fact, we seemed to be at risk of going backwards," he said.

The final cut-off point was extended by a year to the end of 2006 but experts believe that unless an outline deal has been agreed by the summer, it will be impossible to get the final details agreed in time.

Next summer President George Bush must reapply for his right to negotiate trade deals. An increasingly protectionist Congress is unlikely to agree, throwing into doubt any deal still outstanding by next summer.

Meanwhile the EU today increases the range of US imports hit by retaliatory tariffs in response to subsidies under the so-called Byrd Amendment that has been declared illegal by the WTO. Additional tariffs of 15 per cent would be extended to eight new products ranging from blankets to photocopying apparatus, the Commission said. That would take the total value of duties to $36.9m (£21.7m) in the 12 months from 1 May, up from $27.8m in the previous 12-month period.

A spokesman said the move was unrelated to the trade talks. "While the Byrd Amendment issue has been a long-running irritant in the US-EU trade relationship, it is important to note that the huge bulk of trade is trouble-free," he said.