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EU Bullish on Agriculture as WTO Faces Trade Talk Showdown

The European Union is not prepared to make any more concessions on agriculture at next week's key round of global trade talks in Geneva, the French presidency of the bloc said Friday, July18.

Unidentified delegates leave the WTO's headquarters after a plenary session of the WTO General Council, at the World Trade Organization, WTO headquarters, in Geneva, Switzerland

The EU may be divided on many trade issues but could show a united front at the WTO talks

"The EU has exhausted its room for maneuver in agriculture and cannot go any further. So we will not be making any further concessions," said Anne-Marie Idrac, a French government minister in charge of foreign trade.

Idrac was speaking on the sidelines of an extraordinary meeting of EU ministers, convened in Brussels to prepare the groundwork for next week's World Trade Organization (WTO) talks where 30 nations will try to salvage a set of long-floundering trade liberalization negotiations.

Those talks will address the so-called Doha Round, which seek to bring down global trade barriers.

The negotiations have been dragging on since the round was launched in the Qatar capital in November 2001, amid disputes over subsidies to farmers by the US and EU and tariffs on industrial goods imposed by the developing economies of Asia and Latin America.

The 27-member EU runs the risk of being divided, with its southern members focused primarily on the agricultural sector and its northern members more interested in the services and industrial sectors.

But Idrac insisted on Friday that ministers had agreed to be united in strength.

The minister also reaffirmed the member states' backing for the EU's chief negotiator, Trade Commissioner Peter Mandelson, in spite of the fact that her president, Nicolas Sarkozy, had openly criticized his anti-protectionist stance only a month ago.

EU trade chief warns of failure

Mandelson on Thursday said that a failure to reach a deal in Geneva would hamper economic growth.

European External Trade Commissioner Peter Mandelson

Mandelson says failure could hamper economic growth

The commissioner also said the EU was willing to accept a compromise deal drafted by WTO head Pascal Lamy on the gradual reduction of EU import tariffs on bananas from Latin America.

The EU currently offers more favorable conditions to banana exporters from its former colonies in Africa, the Pacific and the Caribbean (APC).

Idrac said the EU would have to "strike a balance" between the requests of Latin American producers, the need to encourage economic growth in the poorer APC countries, and the interests of the EU's own banana producers.

The minister also called for an effective "anti-concentration" clause to be included in the rounds.

The clause, which is designed to prevent developing countries from defending entire sectors of their economy, has been strongly criticized by India.

One German government minister said next week's talks had a "50 to 50 chance" of succeeding.

"There are still plenty of obstacles and risks," said Bernd Pfaffenbach, a junior minister who acts as Germany's Sherpa at Group of Eight meetings. Pfaffenbach said the EU was not prepared to obtain a deal "at any price."

Ireland threatens veto

Ernte in Argentinien Sojabohnen

France has been restrained on trade since taking on the presidency

While France avoided controversy on agriculture, Ireland -- Paris' long-time ally on agriculture -- accused the European Commission of offering too much as Europe's negotiator within the WTO while getting little in return.

"I think they have gone way too far on agriculture," Irish Trade Minister John McGuinness told journalists. "We are keenly interested in a deal... however that deal has to be balanced."

He also refused to rule out the possibility of Ireland vetoing any trade deal that did not suit Dublin, describing it as an "option."

Accounting for 20 percent of global trade, the EU is a heavy hitter in the WTO, where it has long been under pressure from emerging agriculture powers and the United States to ease its farm support.

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