WTO trade deal makes progress

BALI, Indonesia (AP) - A possible World Trade Organization deal moved closer to approval Friday after a row over food subsidies was set aside following hours of global negotiations that went late into the night.

Trade ministers had come to the four-day WTO meetings on Indonesia's resort island of Bali with little hope that a slimmed-down agreement would be reached, with India refusing to budge on a provision that could endanger subsidies for grains under a policy to feed its poor.

But a draft proposal released late Friday to be decided on by the ministers put the subsidy issue on the backburner, allowing it to be taken up at a later point and opening room for consensus. The proposal also would simplify customs procedures.

India Trade Minister Anand Sharma said he endorses the draft proposal.

"This is a decision which is historic, and it will resonate in all continents," he said.

The deal could boost global trade by $1 trillion and help revive the WTO's broader Doha Round of trade negotiations, sometimes known as the development round because of sweeping changes in regulations, taxes and subsidies that would benefit low income countries.

The idea is that if all countries play by the same trade rules, then all countries, rich or poor, will benefit. But some critics say WTO rules may hinder countries from setting their own priorities in environmental protection, worker rights, food security and other areas. And they say sudden reductions in import tariffs can wipe out industries, causing job losses in rich and poor countries.

The meetings in Bali were seen as crucial after more than a decade of inertia, with failure possibly signaling an end to WTO's relevance as a forum for multilateral trade negotiations among its 159 member economies.

"For the first time since 20 years, the WTO has proven to itself and the world that it actually provides an effective forum to negotiate multilateral trade openings," Matthias Helble, a global trade expert at the Asian Development Bank Institute and former WTO adviser, said in an email. "The deal thereby defies critics who asserted that the large number of members and their diverging interests would make results impossible."

The deal could still face hurdles and must be approved by all members. It was expected to be presented to the ministers and decided on early Saturday.


Associated Press writer Kay Johnson in Mumbai, India, contributed to this report.