WTO chief warns of threat to trade talks

Global trade talks that could lift millions out of poverty by abolishing unfair subsidies are heading for failure despite the dramatic intervention of leaders of the G8 rich nations, the head of the World Trade Organisation said at the weekend.

Supachai Panitchpakdi, the WTO's director general, launched a blistering attack on the 148 governments that make up the WTO just a day after the leaders of the G8 rich nations made a major breakthrough by agreeing to eliminate the $300bn (£173bn) a year they hand out to their farmers.

Dr Supachai said he had hoped the unprecedented agreement by the US, Europe and Japan to end the payments that make it hard for poor farmers to compete would kick-start the negotiations.

Ministers from the WTO nations have just five months to strike a deal to break down more tariffs and other barriers to trade, and to try to open up commerce to help developing countries.

"I am afraid we have to face the facts. These negotiations are in trouble," Dr Supachai told the countries' ambassadors at the WTO's Geneva headquarters after returning from the G8 summit chaired by Tony Blair at Gleneagles.

"The crisis that threatens is all the more menacing because it is not a crisis of dramatic divergences or headline-grabbing conflict - it is a crisis of immobility. I think there is still a slender chance of averting it, but every hour must be made to count."

In a separate move, Rodrigo de Rato, the head of the International Monetary Fund, said that a deal at the WTO ministerial meeting in Hong Kong would be "easier said than done".

WTO members are facing a race to hit the December deadline after spending the three and a half years since the launch of the talks in a series of disagreements. The talks almost collapsed in September 2003 after four African states walked out in disgust at the negotiating tactics adopted by the rich countries. Only the intervention of the US and the EU last July got the negotiations restarted.

Dr Supachai said he welcomed a statement by G8 leaders calling for the abolition of agricultural export subsidies by an unspecified "credible end date".

"Frankly, it is sobering to pass from the high level of expectations and hopes that I have encountered in Scotland to the reality of the negotiating process here in Geneva," he said.

But poor countries and campaigners criticised the G8 for failing to set a deadline for the abolition of agricultural export subsidies that allowed their farmers to dump cut-price produce on world markets, thereby preventing poor producers from competing fairly and increasing reliance on aid.

Charles Abugre, the head of policy at Christian Aid, said: "Passing the buck to the WTO meeting in December is absurd. If the eight most powerful economies could not agree on cutting back subsidies, the G8 will have failed."

Trade ministers from 30 leading WTO members, including the EU, US, Brazil and India, meet next week in China to focus on the current negotiations. All members will then meet in Geneva at the end of the month, when Dr Supachai will present a report on the state of the talks.

In an interview with The Independent on Saturday, Dr Supachai criticised political leaders from across the WTO's membership for failing to provide political leadership and for playing games of "brinkmanship".