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WTO Talks Yield Little Progress

Trade negotiators failed to tackle the toughest issues in a draft agreement circulated at WTO talks Saturday, showing they were making only modest progress as the meeting entered its final hours.

India's Commerce Minister Kamal Nath said there were "serious flaws" in a draft text of a World Trade Organization agreement and hoped that they would be corrected by the time the meeting concluded the following day.

The draft text, which forms a basis for a final statement to be issued by the WTO Sunday, showing that trade negotiators have made modest steps in a few areas during the six-day talks, with many gaps and loopholes, including key parts that remained in brackets, meaning they still had to be accepted by all WTO members.

"I believe it's a step forward, but there still are serious flaws," Nath said. "There are brackets, there still are serious flaws. We hope that those flaws will be corrected."

One of the most contentious issues was setting a deadline for ending government payments to domestic producers to promote exports. The draft suggested that such export subsidies be eliminated by 2010, a date that is likely to meet opposition from the European Union.

In a victory for West African cotton growers, the draft calls for rich nations to end export subsidies for cotton in 2006.

The text also showed progress on the issue of granting duty-free and quota-free access for goods from the world's poorest countries, suggesting that all developed nations would agree to the proposal.

But major gaps remain, in particular on a date by which members would agree to a precise method for reducing agricultural trade barriers, a key demand of poorer nations. A dispute over how much wealthy nations should cut their tariffs and farm subsidies has been a major obstacle during the meeting.

Earlier, a top U.S. trade official said delegates from the WTO's 149 member nations and territories still had a chance to deliver a positive result that would benefit developing nations in particular.

"The potential is there, but it is just beyond our fingertips," U.S. Deputy Trade Representative Peter Allgeier said.

The goal of the Hong Kong meeting was to produce a detailed outline for a binding global free trade agreement by the end of 2006. But the six-day meeting appeared doomed even before it began due to the impasse over agricultural trade. From the start, delegates began floating the idea of a follow-up ministerial meeting in March or April, assuming there was little chance for a breakthrough.

A failure in Hong Kong could seriously undermine the WTO's credibility. Previous trade-liberalization talks in Cancun, Mexico, in 2003 and Seattle in 1999 collapsed in disarray. And the current Doha round of talks, started in 2001 in Qatar's capital, is already two years behind schedule.

"The penalties of failure, the economic consequences are very real," said Harold McGraw II, chairman of The McGraw-Hill Companies, who was among many business executives in Hong Kong lobbying for progress, especially on lowering tariffs and other limits on manufactured goods and services.

"Failure here puts into question the promise of the WTO," he said.

Meanwhile, dozens of South Korean protesters scuffled with riot police near a WTO meeting venue Saturday in Hong Kong, tossing eggs at security forces and hitting them with bamboo poles.

Police with riot shields and helmets fought back with clubs and pepper spray, which stings eyes and skin.

This gathering has seen none of the large-scale violent protests that have marred past WTO meetings. Well-organized groups of South Korean farmers have scuffled with police, but there have been no arrests, severe injuries or serious property damage reported.

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