Trade negotiations continue in Switzerland

“We’ve got more work to do,” Canadian Trade Minister Jim Peterson said.

“We are very close to an agreement. There is a package on the table and the parties need to consult. So we have to wait and see,” added EU Agriculture Commissioner Franz Fischler.

Around 20 delegations took part in the overnight talks, but all 147 WTO members must agree to any deal.

The biggest sticking point appears to be how to handle ”sensitive” farm products ” on which countries like Japan and Switzerland want to maintain higher import tariffs to protect their domestic producers.

Many delegates said they had already changed their plane tickets to give them time to work line-by-line through a compromise proposal aimed at satisfying the demands of both rich and poor countries on liberalising international trade.

The document – drafted by senior negotiators and released to the WTO’s members early on Friday – was mostly welcomed by the European Union and the United States, but met with concerns from some other members.

“The show is not over yet, far from it,” said Dutch Trade Minister Laurens Jan Brinkhorst, representing the EU presidency. “There are still considerable hurdles to overcome, but I think we see it as a good basis to start from.”

The WTO agreement, if approved, will be an important step forward in the current round of negotiations, which aim to cut tariffs, subsidies and other barriers to international trade. The changes would affect everything from farm goods to high-tech products to finance.

The deal was originally supposed to be approved at the WTO’s collapsed ministerial meeting in Cancun, Mexico, last September. Failure to reach agreement this week will delay the trade round by months if not years, as the US presidential elections and political changes in other countries will prevent the WTO from taking any major political decisions until at least next spring.

The new proposal called for cutting tariffs and subsidies in a bid to satisfy rich and poor nations in the difficult areas of agricultural support and trade in manufactured goods.

Trade ministers and diplomats at the 147-nation World Trade Organisation had originally planned to finish by Friday. Delegates predicted that they would be there all day today, and officials said they had no plans to leave the talking to junior diplomats or other countries.

“Those who have no interests to defend can leave. We have changed our flights,” said Assad Bhuglah, director of trade for Mauritius.

Although many delegations are generally happy with the text, a few are still vehemently opposed.

In a speech to WTO members yesterday, Osmar Benitez, adviser to the president of the Dominican Republic, said the agriculture part of the deal was “unjust, unfortunate, disappointing, unbalanced and even immoral.”

The new text was only completed at in the early hours on Friday following long meetings between US Trade Representative Robert Zoellick and African cotton-producing nations.

On the key issue of agriculture, the proposal incorporates an offer by a group of five powerful producers – the United States, the EU, Australia, Brazil and India – to make immediate cuts to trade-distorting domestic farm subsidies.

Although most of the treaty would be implemented over a number of years, the proposal calls for an immediate 20% reduction in each country’s maximum permitted payments in the first year after it is agreed.

The document also proposes, for the first time, a cap on subsidies that are aimed primarily at limiting production, amid concerns by some nations that these have been abused in major industrialised countries.

The EU has already agreed to eliminate all its agricultural export subsidies provided other rich countries do the same.