Accord Reached On Global Trade

Martin Redrado, Argentina's chief trade negotiator, agreed, saying, "There's been a tremendous advance" in the text that "assures substantial reform in world agricultural trade."

Among the most important and specific elements of the accord was a pledge that if the round is completed, all subsidy payments to farmers for exported products will be eliminated "by a credible end date." That provision primarily affects the European Union, the biggest spender on export subsidies.

Export subsidies are generally viewed as the most pernicious of rich-country agricultural policies because they go directly for products that are sold abroad.

At the insistence of the Europeans, the pact also calls for the elimination of programs with "equivalent effects" or the placement of strict "disciplines" on their use. These include U.S. export credits for farm goods and state trading enterprises in Canada and Australia.

Other types of farm aid were also targeted in the pact, especially assistance for cotton production, which the United States heavily subsidizes. Because cotton is a major crop in poor African nations, the pact singled out cotton for special attention, with a vow that the round will aim for "ambitious" and "expeditious" cuts in subsidies.

The agreement calls for "harmonization" of subsidy levels, a key demand of the United States, meaning that governments with higher amounts of subsidies -- that is, the European Union -- will be subject to deeper cuts.

At the same time, Washington agreed to a "first installment" in subsidy cuts -- described as a 20 percent reduction that would take effect the first year after the Doha Round is completed. But that concession included loopholes that could make the actual cut in payments to farmers much less than 20 percent of the $19 billion Washington is allowed to make under WTO rules governing "trade distorting" subsidies. For one thing, the United States could reclassify some of its subsidies to a separate category that is subject to looser limits.

With the presidential election approaching, Zoellick was operating under enormous pressure from farm groups not to surrender too much on subsidies unless he was able to secure major concessions from other countries that would enable American farmers to sell more of their production overseas.

On that score, the result -- as in many other areas of the text -- involved a great deal of delicately worded phrases that papered over differences and did not guarantee a commitment to reform.

The wording was included to placate food-importing nations such as Japan and South Korea, which fiercely protect their rice farmers; Switzerland, which shelters its dairy industry; and India, which fears that opening its agricultural markets would devastate its hundreds of millions of subsistence farmers.

The agreement said countries can choose "an appropriate number, to be negotiated" of products that would be deemed "sensitive" -- that is, eligible for relatively high tariffs.

On the other hand, they would have to make "substantial improvement" in the openness of their markets in those areas.

Concerning manufactured products, the agreement calls for nations with high tariffs to cut them more deeply than countries with low tariffs. But many developing countries, anxious to protect their domestic industries, balked at that wording and insisted on adding a paragraph stating that "additional negotiations are required to reach agreement" on the issues involved.

Reluctantly, the United States and European Union bowed to that demand, hoping that in the final negotiations the developing countries will offer major tariff cuts so that they can secure concessions on farm subsidies and other issues.

Despite all the evidence that the negotiators just delayed many disputes, Jeffrey J. Schott, an expert on WTO affairs at the Institute for International Economics, said the accord marks a major advance.

"When you play rugby, and you punt forward, you're making progress," Schott said. "In a lot of the areas where you would like to see more specific commitments, more hard numbers, it really is not doable until you are very close to the completion of the negotiations."

That could likely come in 2006, Schott added, when Congress is to rewrite the U.S. farm bill and the European Union is to change its Common Agricultural Policy.