Pascal Lamy: the EU is under pressure to compromise

A row over imports of tuna and bananas to the European Union has been settled, removing a major roadblock to a final agreement to launch a new trade round.

Trade ministers from 142 countries are working past their deadline of midnight in an attempt to reach a deal which would open the way to fresh global trade talks.

World Trade Organisation (WTO) spokeman Keith Rockwell said there were still major players who had "significant difficulties" with key issues that need resolution - including agriculture, environment, investment and textiles.

But the settlement of the unexpected dispute - which involved a waiver for a pre-existing trade pact between the EU and ACP countries which others viewed as unfair - has cleared one hurdle to a deal.

Old issues reappear

The dispute arose because the EU has a special deal with its former colonies, the African, Caribbean and Pacific (ACP) countries, which gives them trade preferences.

The EU and the ACP countries wanted the WTO to give that deal its seal of approval at this trade summit.

But countries who felt they have been disadvantaged by the deal, notably Ecuador - which would like to sell more bananas to the EU - and Thailand and the Philippines, who export tuna, wanted some concessions before they agreed to the waiver which will permit the EU-ACP deal.

The issue could have unravelled the whole summit because under WTO procedures, which are based on consensus, all countries must agree before a decision can be taken.

Agriculture remains the key

If this issue can be resolved, the trade talks will come down to whether a compromise can be fashioned on the issues of agriculture and the environment.

The EU has been under pressure to abandon its tough line on agriculture.

But it is hoping for some movement on environment in return, an issue where European public opinion feels strongly.

A senior UN official told the BBC that he had detected some movement on the environment issue, with an accelerated timetable and the possibility of environmental impact statements.

Other countries, especially from the Cairns group of agricultural exporting nations, are pressing the EU to reduce its generous agricultural subsidies under the Common Agricultural Policy, worth $90bn a year.

They say the aim of negotiations should be a "substantial reduction in, with a view towards phasing out, agricultural export subsidies."

The French economy minister Laurent Fabius said that "no European" could accept such a clause, as it implies a pre-determined end-point for the negotiation.

But the EU admitted that it was isolated on this issue, with even Japan - which has a highly protected agricultural sector - unwilling to back the EU line.

However, with all 15 EU countries having to agree any trade deal negotiated at Doha, and with France facing elections early next year, there will be a long night of negotiations ahead.

Under pressure

EU negotiators, who are under the most pressure to make concessions, have said that they cannot exclude the possibility of leaving the talks if they do not get more progress on agriculture and the environment.

Press spokesman Anthony Gooch told reporters that Europe had given a lot without gaining very much in return so far.

World leaders have set high hopes on agreement, in order to send a signal that collective action to help revive the slowing world economy is possible.