Battle lines drawn on agriculture trade By ADAM ENTOUS, Reuters THE United States and major agricultural exporting countries closed ranks last week on farm trade goals for the next round of global trade negotiations, insisting that export subsidies be abolished over objections from the European Union. The EU immediately rejected the demands of the US and the Cairns Group of 18 farm exporting nations, which includes Australia, Brazil, Argentina and Canada. "This will not float for us," EU Trade Commissioner Pascal Lamy said. The moves came as protests forced the World Trade Organisation (WTO) to delay its opening ceremony in Seattle for several hours and relocate to a more secure building. On the sidelines of the WTO meeting, US and Cairns Group negotiators said they agreed on most of the key elements of their agriculture negotiating position, including the elimination of export subsidies, increased market access and substantial reductions in domestic support for farmers. In a draft document obtained by Reuters, developing countries would be granted special treatment, a move that Washington hopes will garner support from a key constituency as US and Cairns negotiators try to outmanoeuvre the EU and other trading powers to shape the agenda for a new round. According to the draft document, a new round of global trade negotiations would give "special and differential treatment to developing country members". Specifically, it called for the WTO to "substantially improve access for products of particular interest to developing countries". Agriculture is one of the most contentious issues facing trade ministers, who met from last Tuesday through to Friday in Seattle in hopes of launching a new round of global negotiations. The US wants the EU to scrap farm export subsidies. By US estimates, the EU accounts for roughly 85 per cent of farm export subsidies worldwide. But the EU, backed by Japan, South Korea, Switzerland and Norway, has thus far refused to give ground, infuriating US farm groups and their allies in Congress. They say farm produce cannot be treated in the same way as industrial goods and that subsidies are essential to help farmers preserve the environment and to ensure that every country can produce enough food for itself in time of emergency. At a news conference, Mr Lamy said Brussels' position was similar in key elements to that of many demonstrators in Seattle, who claim that WTO rules work against preservation of the environment. "We want the WTO to take into account non-trade as well as trade concerns in agriculture. This is our bottom line and we will be very firm on it," Mr Lamy said. The apparent US-Cairns draft document also called for "substantial reductions in domestic support". By currying favour with developing nations, the US and the Cairns Group hoped to build opposition to the EU ahead of critical negotiations. As required by the 1994 Uruguay Round agreement, the EU has reduced export subsidy spending and shipments in recent years. But the US has gone beyond its Uruguay Round commitments and halted most farm export subsidies, except for a small volume of dairy products. Many analysts consider export subsidies the most trade-distorting farm policy instruments because they pass the cost of a government's farm program on to other countries. In the EU's case, many of its farm products are not competitive in world markets because of domestic programs that guarantee farmers a high price. To get rid of surpluses, they must subsidise exports, robbing farmers in other countries of sales and depressing world prices, US officials contend.