Historic WTO trade pact just a gavel away

Rich and poor nations were set for a historic deal yesterday to slash billions of dollars in farm subsidies, create more open industrial markets and put troubled global commerce negotiations back on track.

Although the accord must still be formally approved by the World Trade Organisation's 147-members at a session due to start at 2000 GMT, top negotiators from both North and South said that they had finished their work and the hard days of wrangling were over.

"The momentum is such that it is difficult not to conclude (successfully)," Brazilian Foreign Minister Celso Amorim told reporters at the WTO's headquarters.

"I think that it is going to be approved," said India's Commerce and Industry Minister Kamal Nath, whose country shares leadership of the G20 developing nation alliance with Brazil.

Almost a year after talks collapsed in acrimony at a meeting in Cancun, Mexico, WTO members were on the verge of gavelling through a pact on contentious trade issues, ranging from farm reform to the launch of negotiations on a new customs code.

A deal would put the WTO's Doha Round of free trade negotiations, which could inject billions of dollars into the world economy when finished, firmly back on track, officials and negotiators said.

"This is the beginning of the end for (farm) subsidies. Export subsidies will be eliminated first," added Amorim.

The G20 alliance played a key role in the failure of last year's talks in Cancun, where it mounted fierce attacks on the farm subsidies of rich powers, such as the United States and the European Union. It says they deny them world markets.

"Who knows if there may be a last-minute problem, but it looks like we got it done," said Australia's ambassador to the WTO, David Spencer.

After an all-night negotiating marathon, key WTO members, including the United States, the European Union and Brazil and Japan, agreed to the elimination of export subsidies at a date yet to be set, long a key developing country demand, to limit other subsidies and lower tariff barriers.

Agreement on the sensitive issue of agriculture opened the way for a similar understanding in industrial goods trade and development issues, other areas in which the WTO was seeking a framework accord to serve as a basis for future more detailed negotiations as part of the Doha Round.

The World Bank says the round, whose conclusion could still be years away, could help lift over half-a-billion people out of poverty through increased trade.

EU Agriculture Commissioner Franz Fischler, who has been fiercely criticised by France, the biggest beneficiary of EU farm subsidies, for giving away too much, said the EU could "broadly accept" the farm deal.

A delegate from Mauritius, which has taken a leading part in the WTO talks on behalf of African nations, said that the so-called Group of 90 developing country alliance could also live with the text, even if it did not get everything it wanted.

Failure in Geneva would risk delaying further trade liberalisation for years.

The EU, the United States and countries such as Japan and Switzerland, have said they will not slash the generous subsidies they lavish on their farmers unless they get greater access to developing country markets for industrial goods.

But the proposed text makes clear that the poorest countries will not be forced to contribute to market opening in any area, including services.

The search for a deal had been speeded on Thursday after the US and African cotton producers overcame their differences in the handling of a crop which is often held up as a prime example of how rich nation subsidies shut out the poor.