THE following issues are central to the deadlock in the Doha Round talks among the 149 World Trade Organisation (WTO) governments that are scheduled to kick off Geneva at the end of next week:
Agriculture accounts for just 10 per cent of global commerce. But it has grabbed the limelight in the Doha Round because of its huge importance to the economies of developing countries.
They are resisting concessions in other areas until rules are made fairer in the agricultural sector.
The "three pillars" of farm talks are:
These are judged to be the most damaging to fair trade because they weigh on global prices and can give farmers in rich countries the edge on their counterparts in the developing world.
A WTO conference in Hong Kong last year agreed that they should be eliminated by the end of 2013, a compromise between the 2010 date suggested by Brazil and the United States, and 2014, which fitted better with European Union plans.
In exchange Brussels wants an end to export credits and food aid by Washington that are also seen as undermining poor farmers, as well as tougher rules for state export companies in Canada and Australia.
- Domestic Subsidies
The United States has offered a 53 per cent cut in support for US farmers, which critics charge helps American agri-business undercut its competitors.
In return, Washington wants Brussels to make a cut of around 75 per cent, on the grounds that the EU is allowed to spend more under current WTO rules.
The EU wants the US to make a 60 per cent cut, while offering to reduce its own subsidies by 70 per cent.
Developing countries want the United States to cut subsidies by 75 per cent, saying anything less will have little real bite.
The United States has been under particular pressure from cotton-producing countries in West Africa which want it to halt the four billion dollars it pays to American cotton farmers.
The Hong Kong conference decided export subsidies for cotton should be scrapped in 2006 but did not immediately tackle domestic support, leaving African nations disappointed.
The European Union is under fire from exporters such as the United States, which is seeking a 60 per cent cut in EU duties on farm produce, and Brazil, which wants 54 per cent.
They say that an existing proposal by Brussels only means a 39-percent cut.
The EU counters that the real level would be 46 percent and says it cannot go any further unless fellow WTO members make concessions in other areas of the talks.
EU negotiators have indicated they may be able to move closer to the Brazilian figure, but have faced resistance within their 25-nation bloc. France, notably, has warned against deeper cuts.
Brussels also wants to keep higher tariffs on dozens of farm products that, under WTO rules, have been classed as "sensitive" by the EU.
Net food importing countries such as Japan and Switzerland, which also want to protect vulnerable or culturally important parts of their farming -- including Japanese rice -- oppose the idea of a ceiling on duties.
Rich countries have been seeking a generalised cut in import tariffs according to the "Swiss formula," so-called because it was first set out by Switzerland's negotiators.
It would oblige all WTO members to reduce their tariffs to below a fixed level -- the EU says it should be 10 percent.
Developing countries would benefit from "special and differential treatment" but are still pressing for a smaller tariff reductions to protect their industries.
The WTO draft suggests that developing countries make smaller cuts in duties than wealthy nations.
Covering 163 sectors including banking and insurance, these talks are based on a "request-offer" process. Countries ask their trading partners for liberalisation in specific areas and the latter come up with their own proposals in return.
But fewer than 100 members have made an offer. Developing countries reluctant to advance this part of the talks until rich countries make concessions in other areas.
The formal name of the WTO talks is the Doha Development Agenda, after an agreement five years ago that their final overall deal should aim to boost living standards in poor countries.
The discussions in Hong Kong yielded a package of additional measures aimed at helping the world's least developed countries (LDCs), around 30 of which are WTO members.
The measures including allowing their most of their goods exports to be exempt from duties or quotas in rich countries by 2008.
But critics charge that the package is flawed. It enables importing countries to place hurdles in the way of 3.0 per cent of LDC goods, which could hamper key export earners such as textiles and leather.
WHAT IS THE WTO?
The World Trade Organisation (WTO) was established in January 1995 with the aim of helping global commerce flow as freely and fairly as possible.
It also oversees trade rules agreed by its members.
-- Based in Geneva, the WTO has 149 members. About three quarters of them are developing countries.
-- The WTO replaced the looser General Agreement on Tariffs and Trade (GATT) which had laid down the rules of commerce since 1948. GATT oversaw eight rounds of trade negotiations.
-- The WTO was formed at the end of the GATT's Uruguay Round that ran from 1986 to 1994. WTO agreements cover not only goods, as was the case under the GATT, but also trade in services, inventions, creations and designs.
-- Although a procedure for settling disputes existed under the GATT, the WTO system is faster and more extensive, even though trade cases can still last for several years from an initial decision to a final appeals ruling.
WTO rulings are binding and cannot be blocked.
Experts hear complaints, give rulings and authorise a country to impose sanctions against another WTO member. Contentious issues have included aid for the aircraft and shipbuilding industries, trade in bananas, corporate tax breaks, Internet gambling, textiles, sugar and steel.
-- One of the key planks in all WTO accords aims to prevent countries from discriminating between trade partners. A special favour such as a lower customs duty rate granted to one partner has to apply to all other WTO members.
-- Ministers from member countries hold formal conferences at least once every two years: Singapore 1996, Geneva 1998, Seattle 1999, Doha 2001, Cancun 2003 and Hong Kong 2005. They gather regularly in between for formal and informal sessions.
-- In November 2001, members meeting in the Qatari capital, Doha launched a new "round" of talks to liberalise trade in new areas.
Known as the Doha Development Agenda, it was originally scheduled to run until the end of 2004. After the Cancun conference collapsed, the target was shifted to the end of 2006.
-- The negotiations cover agriculture, including reducing subsidies and opening markets, liberalising services, including banking, insurance and tourism, and lifting barriers on non-agricultural products that range from industrial products to fish.
Other issues are "trade facilitation," or smoothing the way for commerce by cutting red tape, as well as trade and the environment, intellectual property and "geographical indications" or place names used to identify products.
-- The WTO takes decisions on the basis of consensus among all members, not majority voting. Under its "single undertaking" rules nothing can be agreed until everything is agreed.
-- The ruling executive is the WTO General Council, which groups trade ambassadors from all member governments.
-- Former European Union trade chief Pascal Lamy took over as director-general from Thailand's Supachai Panitchpakdi in September 2005.