The World Trade Organization statement approved by the global body's 149 member governments in Hong Kong Sunday marks a further step in the Doha Round negotiations, launched in 2001. Read more to find out what it means.
Much work to be done
WTO members aim to complete a final deal at the end of 2006 in order to start wide ranging trade reforms in 2008 that would reduce trade barriers and boost the economies of poor countries.
The following are the key areas of the statement agreed upon Sunday in Hong Kong .
Governments accepted the elimination of all forms of export subsidies by the end of 2013. Such payments are seen as skewing farm trade, creating unfair competition for poor countries. A "substantial" part of the cuts are meant to be underway by around 2010. That was seen as a compromise between the European Union, which pushed for a later date, and Australia, Brazil and the United States, which wanted a 2010 cut-off. In exchange, the EU won a commitment that food aid, which Brussels says is misused by Washington to offload the US farm surplus, and monopoly firms that sell grain and dairy products from Australia, Canada and New Zealand will be examined to ensure they do not distort trade.
Cotton is a hot topic
A key product of West African countries, cotton from the world's poorest nations will be allowed to enter markets in the industrialized world duty- and quota-free from 2008. However, this measure is seen as insufficient by African cotton-producing countries, which have the United States in their sights and note that Washington's import duties are under 2 percent. The real problem, they say, is the $4 billion in subsidies paid to US cotton growers, which allow the American cotton sector to drive down world prices. While the accord said cotton export subsidies offered by rich countries should be eliminated next year, it did not fix a date for removing the domestic subsidies that make up most of the payouts. It simply said they should be cut "more ambitiously" than subsidies on other farm goods.
Industrialized countries, and developing countries "declaring themselves in a position to do so," promised to give "at least 97 percent" of goods from the world's least developed countries access to their markets from 2008.
This area logged the least progress. In exchange for farm trade concessions, rich nations wanted developing countries to give them more market access for manufactured goods. But the deal simply said that customs duties will be reduced to maximum levels which are yet to be set out.
Negotiations on liberalizing trade in this area, which includes banking, insurance and tourism, will aim at "promoting economic growth of all trading partners and the development of developing and least-developed countries," the deal said. Rich countries are pressing poor nations for more trade concessions. The statement said that new market-opening requests should be made by the end of February and that governments must draw up their final plans on services by the end of October.