By Steven Gray

Developing countries yesterday expressed dissatisfaction with the latest proposed outline for a trade agreement to be considered at the upcoming meeting of World Trade Organization ministers in Mexico, saying the document failed to fully reaffirm the group's commitment to eliminating farm subsidies.

The countries, led by Brazil and India, pledged to present their own proposal at the meeting next month in Cancun of the 146-member Geneva-based organization, which writes and enforces the rules of global trade. At the last ministers' meeting in Doha, Qatar, in 2001, the group launched an effort to try to negotiate a new agreement to lower world trade barriers by 2005, and the Cancun meeting marks a critical step in that process.

The proposed outline "gives precedence to the views of some developed countries, particularly the largest ones," Luiz Felipe Seixas de Correa, Brazil's ambassador to the WTO, said yesterday during a meeting in Geneva. "It has to be fundamentally changed. Otherwise, it will fail and we will all fail. The key word is inclusiveness."

The draft document, presented in Geneva late Sunday by Carlos Perez del Castillio of Uruguay, the chairman of the WTO's ruling general council, acknowledges there are vastly differing opinions on key issues, particularly on agricultural trade and whether the organization's regulatory scope should be broadened to include investment and government procurement, among others.

The document is being circulated among trade ministers and if unanimously accepted during the Sept. 10-14 meeting in Cancun, would become a binding document carrying the force of law. In a statement released with his proposal Sunday, Castillio acknowledged that "this is a very delicate process. Trying to reconcile the interests of 146 members . . . is bound to be so."

"We should be under no illusion," he added. "Ministers face a tough but far from insurmountable challenge at Cancun."

Constant sparring between developing and wealthy nations, particularly over agricultural issues, have led some international trade experts to believe that the series of recent compromise proposals, and the negotiations themselves, may be doomed.

"This text admits they're jammed, and lists places where things had to be done and where nothing's been done," said Lori M. Wallach, an international trade lawyer who is director of Global Trade Watch, a group founded by Ralph Nader. "The question is, as they get more desperate to finish the negotiations, will they get to Cancun and say 'We're stuck.'?"

The document embraces much of the compromise reached earlier this month by the United States and the European Union, which would limit farm subsidies based on acreage, rather than on how much fruits and vegetables farmers produce. Europe and Japan, in particular, have resisted cutting their domestic farm subsidies, arguing their agricultural industries could not survive without them. Then last week, a coalition of developing countries, led by Brazil, India and China, presented their own proposal urging the WTO to reaffirm its commitment to moving toward the elimination of farm subsidies and opening wealthy nations' markets to the exports of poorer ones.

Now the United States and EU must try to win the support of all the organization's member states, the vast majority of which are poor and have criticized the US-EU proposal as lacking depth and meeting the needs of only the wealthier nations.

Rubens Antonio Barbosa, the Brazilian ambassador in Washington, said yesterday that from the developing countries' point of view, the US-EU proposal "tried to accommodate their interests without taking into consideration the concerns of the developing countries."

Nathan Irumba, Uganda's ambassador to the WTO, said in a recent telephone interview from Geneva that the US-EU compromise "lacks specific figures, and it's not clear on how far it's going to go in reducing subsidies." - "We'll have to wait and see if we'll get further" subsidy reductions, he said. "Our fear is that it could end up codifying the status quo."

Yesterday, it appeared that Castillio's draft did not appease American officials. Richard Mills, spokesman for the U.S. trade representative, said the US-EU compromise was ambitious in seeking the "lowering of trade barriers for the benefit of the global economy." But Mills said of Castillio's proposal that "in some ways, he hit the mark," and "in other cases, he missed the mark in the hopes of forging consensus."

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