U.S. and EU face calls for farm reform at WTO

By Laura MacInnis and Jonathan Lynn

GENEVA (Reuters) - Developing countries and food exporters from rich and poor nations called on Sunday for the United States and European Union to open up their farm markets and eliminate trade-distorting subsidies.

Global trade in farm products was at the centre of discussions as ministers from three dozen trading powers met in negotiating alliances to prepare for next week's make-or-break talks on a new world trade pact.

World Trade Organisation Director-General Pascal Lamy has called the ministers to Geneva to seek a breakthrough in the WTO's 7-year-old Doha round to free up world trade.

The various alliances among the WTO's 152 members, from the Cairns group of food exporters to the African, Caribbean and Pacific (ACP) countries met on Sunday to plot their strategy.

"Those members responsible for the most significant distortions in global agricultural trade -- the EU, U.S. and Japan -- bear a heavy responsibility," the Cairns Group of agricultural exporters said.

"We can and must now seize this opportunity to secure the main parameters of the Doha round. The costs of failure are too high," the group, whose members include Canada, New Zealand, Argentina, South Africa and Thailand, said in a statement.

NOW OR NEVER

Australia, which chairs the group, said the prospects of a Doha deal were better than ever.

"This in our judgment is the best opportunity ever, in the whole seven years of this round, to conclude the deal," Trade Minister Simon Crean told a news conference.

World Bank President Robert Zoellick said progress on farm issues would bolster confidence in a world economy strained by soaring food and energy prices and a financial crisis.

"It has never been more important for WTO members to move forward on the Doha Development Agenda," he said in a statement before the talks.

"It is now or never," said Zoellick, who as former U.S. trade representative helped launch the Doha round in 2001.

He said an open and fair trading system would give farmers in developing countries a reason to expand production. Consumers would benefit from lower prices and governments could save on the costs of subsidies and improve their budgets.

But ministers will face tough negotiations next week as they seek a deal on tariff and subsidy cuts in the most sensitive areas of agriculture and industrial goods, and the main exceptions to them.

Developing countries want rich nations to open up their markets for farm goods like beef and cotton, in exchange for liberalizing their own markets in industrial goods like cars and textiles or services such as banking and telecoms.