The United States injected life into world trade talks on Monday with an offer of deep cuts in farm subsidies and the future elimination of tariffs, but first reactions showed an end-year deadline for a deal is difficult. US trade chief Rob Portman said his country was willing to accept “some pain” to win agreement and open the way to a new pact that analysts say could pump billions of dollars into the global economy and help lift millions out of poverty.

But the plan, spelt out by Portman at a meeting of trade ministers, was rejected out of hand by Japan as being too demanding, while Brazil said it fell short of what was needed. “The United States is committed to breaking the deadlock in multilateral talks on agriculture and unleashing the potential of the Doha Round”, Portman said, giving the World Trade Organisation talks their official name.

The move immediately triggered an improved offer on subsidies from European Union trade chief Peter Mandelson, who told ministers in his address that time was running out.

“If we do not advance this negotiation in concrete terms this week – and amongst ourselves today – we may simply run out of time,” he said. Trade ministers are due to continue meeting in Geneva on yesterday and today.

The 148-state World Trade Organisation needs to agree a blueprint for the final stage of its Doha Round at a ministerial conference in Hong Kong in December, but negotiations are snagged on a host of issues, with agriculture the most pressing.

“The United States proposal is a good start. We now need to push forward to achieve real progress in lowering barriers to agricultural trade”, said Australian Trade Minister Mark Vaile. But aid agency Oxfam called the plan “smoke and mirrors”, saying it would allow the United States to leave spending untouched and keep dumping surplus food on foreign markets.

The Round, due to be completed by the end of 2006, aims to lower barriers to trade across the global economy. Poorer countries are demanding deep cuts to farm subsidies they say stop them competing on world markets. United Nations Secretary-General Kofi Annan voiced strong support for that stance in Geneva on Monday, saying the poor would only be helped by “a genuinely free and fair trading system”.

Portman said he proposed tariff cuts during the next five years, starting at 55 percent and reaching 90 percent on the highest tariffs in rich countries. After a five-year pause, tariffs could be cut to zero by 2023.

He said the United States was prepared to reduce its subsidies by 60 percent but that others such as the European Union and Japan, which spend more, should slash theirs by 80 percent. Japanese farm minister Mineichi Iwanaga said through a translator: “Japan is not able to accept the United States proposal of domestic support as a basis for further discussions.”

Washington has been under pressure for weeks to come forward with farm proposals, but the United States negotiators have been loath to move without more progress on how far other countries would cut tariffs to open their markets to American farm produce.

The European Union’s Mandelson offered to cut domestic farm support by 70 percent, up from the 65 percent it had floated previously.

Developing countries such as Brazil and India link opening their markets wider to industrial goods from developed countries to rich nations’ readiness to move on the agriculture front. But Brazilian Foreign Minister Celso Amorim told journalists that the offers on agriculture were still not attractive enough, particularly on tariffs, where the European Union had to do more.

<B>Richard Waddington

Thomas Atkins</B>