Groups give thumbs down to WTO deal

AID agencies, environmentalists and trade unions gave a damning thumbs down last night to a limited agreement reached at the conclusion of world trade talks in Hong Kong.

Developing countries signed up to a draft final agreement to end rich countries' export subsidies by 2013, three years later than they had demanded.

But little progress was made on other key aspects.

The European Union came under fire for blocking faster progress towards removing subsidies blamed for damaging developing countries' economies by flooding their markets with cheap goods.

EU Trade Commissioner Peter Mandelson said some WTO members had "lacked ambition" and added "an awful lot of political posturing was put in place of serious engagement and it's frustrating."

Christian Aid's Claire Melamed said there had been no significant impression on world trade rules.

"Cancun crashed and now Hong Kong has failed because of the EU's arrogance," she said.

In a last-minute breakthrough on the thorny issue of farm trade subsidies, wealthy nations agreed to eliminate government payments to promote exports like cotton and sugar by 2013. Developing nations say such payments undercut the competitive advantage of poor farmers.

The 2013 date was a key demand of the EU, which faced intense pressure from Brazil and other developing nations to end agricultural export subsidies by 2010.

In a compromise, the text included a provision that a substantial part of the subsidies would go by "the first half of the implementation period" and a phrase which suggested that timeframe would be set later.

In a victory for West African cotton growers, the draft also calls for rich nations to end export subsidies for cotton in 2006.

Cotton growers in Burkina Faso, Benin, Chad and Mali say the US farm aid drives down prices, making it impossible for small family farms to compete.

The agreement also calls on wealthy nations to allow duty-free and quota-free privileges for at least 97% of products exported by countries with per capita incomes of less than

€590 a year, by 2008.

This represents a US concession to demands by developing countries that say government support for farmers in rich countries is driving many poor farmers out of work.

Guy Ryder, General Secretary of the International Confederation of Free Trade Unions, which represents 145 million workers worldwide, said the deal would "force people in the developing world into having to choose between going to the doctor or putting food on the table."

And Oxfam condemned the "profoundly disappointing" text as a "betrayal of development promises."

The previous WTO gathering in Cancun, Mexico, in 2003 collapsed over agricultural trade, putting the so-called Doha round of talks, launched in 2001, two years behind schedule.

The modest progress in Hong Kong is therefore a relief to trade negotiators.

WTO Director-General Pascal Lamy told delegates: "You put the round back on track. You gave it a new sense of urgency."

Outside the convention centre, at least 5,000 people marched in an anti-WTO parade, a day after hundreds of protesters were arrested in one of Hong Kong's worst spasms of street violence in decades.

The protesters claim the WTO's attempts to open up markets benefit big companies and the rich at the expense of ordinary workers and the poor.