Trade talks stumble along

Much of the struggle of Peter Mandelson, EU trade commissioner, to move the biggest stumbling block in the Doha round lies in getting the enthusiasm of Europe's goods and services exporters for new markets to outweigh French farmers' fear of losing subsidies.

Around the negotiating table in Geneva will be the EU, US, India, Brazil and Australia, forming the core negotiating group intended to provide a range of different interests in the talks.

Complicating their task is a suspicion from some World Trade Organisation members that they are not entirely representative.

Within just the farm part of the Doha talks there is a complexity of interested parties. Australia and Brazil are hyper-efficient agricultural exporters and want to see both lower tariffs and subsidies.

The US faces a farm community split between some competitive exporters, who want new markets opened up abroad with tariff cuts, and less efficient farmers who want to keep their subsidies and tariffs.

EU farmers (though not its consumers) have much more to lose than to gain from any liberalisation, while India would like to see rich countries' subsidies cut but wants to keep the tariffs that protect its millions of small, low-productivity farmers.

Moreover, other countries that are even more defensive of their farmers than India and the EU complain that their views are squeezed out of a Doha round focused on liberalising agriculture.

The Group of 33 poor countries, for example, of which India is a member, recently complained that "it is unfortunate that the G33 are not invited in representative proportion ... to the negotiations".

Japan has repeatedly complained its interests in agriculture it maintains some of the highest farm tariffs in the rich world are ignored.

These ambiguities are reflected in the fact that the offers made so far on farm reform remain far apart - the fear is that there is no intersection between the "red lines" that the various camps will not cross.

The influential Group of 20 developing countries, for example, to which both Brazil and India belong, has proposed heavy cuts in subsidies for rich nations' farmers but modest tariff reductions for poorer countries, a combination the US says it cannot accept.

Some observers close to the talks suspect the G20 tariff offer is already close to a red line for India.

Kamal Nath, Indian trade minister, has a business background and has emphasised his eagerness to get to a deal, something of a contrast to India's foot-dragging in trade talks. But he can't give too much.

India could compromise by giving the EU and US better access to its services markets, where it has already done some unilateral liberalisation and has its own export interest in IT and business services.

But it is much more defensive of its manufacturers, while Brazil does not want to give way on either goods or services.

The G20 at some point must decide whether it wants a deal, says William Cline, senior fellow at the Center for Global Development in Washington. "If there is an insistence on keeping self-injuriously high tariffs as an option, then the thing is not going to fly."