December 19, 2005
Trade Officials Agree to End Subsidies for Agricultural Exports
By KEITH BRADSHER

HONG KONG, Monday, Dec. 19 - Trade ministers representing most of the world's governments reached a deal here on Sunday night that sets a deadline for wiping out subsidies of agricultural exports by 2013, realizing a goal that United States negotiators have been pursuing for two decades.

The final declaration from the talks, which resolved several issues that have stood in the way of a global trade agreement, also requires industrialized countries to open their markets to goods from the world's poorest nations, a goal of the United Nations for many years. The declaration gives fresh impetus for negotiators to try to finish a comprehensive set of global free trade rules by the end of next year, in time for President Bush to submit it to Congress before his special negotiating authority expires.

"I now believe it is possible, which I did not a month ago," said Pascal Lamy, the World Trade Organization's director general.

But the declaration does not settle the biggest trade issues facing the W.T.O.'s members. Some of these issues were barely discussed here because the sides are so far apart, including lower tariffs on agricultural and manufactured goods, and limits on domestic farm subsidies.

Senator Charles E. Grassley, the Iowa Republican who is the chairman of the Senate Finance Committee, said that more negotiations were needed, noting that "on the toughest issues, it just kicks the can down the road."

Other provisions in the declaration include a broad agreement to ban fishing industry subsidies that contribute to overfishing; special help for impoverished cotton-growing countries in Africa; and a plan for the United States, the European Union and Japan to provide several billion dollars a year in aid to developing countries to help them compete in global trade.

With the exception of an end to cotton export subsidies, which is already moving through Congress, American commitments in the declaration will not require Congressional action until a comprehensive trade deal is ready for a vote.

All of the W.T.O.'s 149 member nations and customs territories approved the declaration. The leaders of delegations from Cuba and Venezuela stood up in the last five minutes of the six-day conference to reserve the right to exempt their countries later from new rules being negotiated for service industries like banking, insurance and telecommunications.

As with many trade agreements at the ministerial level, the declaration also papers over differences that could prove troublesome later. The agreement to end agricultural export subsidies by 2013, which was reluctantly accepted by the European Union, calls for a "substantial" part of these subsidies to be eliminated well before then, but does not specify what this means.

Similarly, the ban on fishing subsidies does not define overfishing. And the agreement on cotton postpones the tricky question of how quickly the United States should lower its subsidies, which West African nations blame for depressing the prices that their farmers receive.

Mr. Lamy said that the agreement left negotiators 60 percent of the way to finishing a round of negotiations that began four years ago in Doha, Qatar. Peter Mandelson, the European Union's trade commissioner, acknowledged that the Hong Kong declaration was far from comprehensive.

"If we didn't make the conference a success, we certainly saved it from failure," Mr. Mandelson said.

Susan Schwab, a deputy United States trade representative, was more optimistic. "The progress made today really lays the groundwork for a major negotiation going forward," Ms. Schwab said.

Kamal Nath, India's minister of commerce and industry, especially welcomed a decision by rich countries to eliminate quotas and tariffs by 2008 on 97 percent of categories of goods from the world's 50 poorest nations. The United States currently does not impose tariffs and quotas on 83 percent of categories, and Japan on 87 percent.

The European Union already exempts virtually all imports from tariffs and quotas if they come from the world's poorest nations. It restricts these imports instead with stringent rules specifying that each poor country must produce much of the value of the product itself, instead of importing sophisticated components from wealthier countries for final assembly.

Developing countries had criticized the outcomes of previous ministerial talks as too often dictated by rich countries. "For the first time, it doesn't appear like a script written by developed countries," Mr. Nath said in an interview.

The conclusion of a deal on Sunday evening marked a sharp turnaround from the gloom on Saturday afternoon, when negotiators were deadlocked over several issues while about 1,000 protesters fought the police outside. The violence left at least 116 people injured, including 56 officers, although no one suffered critical injuries, the police said.

A turning point in the talks came Saturday evening, when Mr. Mandelson and Mariann Fischer Boel, the European Union's agriculture commissioner, introduced a proposal calling for a worldwide ban on agriculture export subsidies by 2013.

The successful proposal came after Europe's leaders agreed Saturday morning in Brussels on a budget extending existing farm subsidies through 2013. Mr. Mandelson said he and Ms. Fischer Boel had acted independently, introducing their own proposal Saturday evening.

Industrial countries had agreed in July 2004 that the export subsidies should end, but had been unable after that to set a date.

Until Saturday evening, European negotiators had insisted that they would not accept any deadline for an end to subsidies unless the United States accepted a ban on sending free American-grown food to poor countries. The European Union asked that the United States buy food in poor countries from local farmers instead, pushing up local prices.

Many countries, notably Brazil and the United States, had been discussing a 2010 deadline and had expressed concerns, echoed by the United Nations, that a ban on food aid might interrupt vital shipments to places like the Darfur region of Sudan.

The United States ended up accepting a ban on shipping free American-grown food to areas without shortages and where the American food would displace locally grown food in the marketplace, an arrangement that Mr. Mandelson welcomed.

"We will continue to demand that others move with us, every step, every cut," he said in an interview with a small group of journalists.