The Doha Round of free trade talks back on track. After failing to reach agreement in Cancùn, Mexico, last September on an interim deal on parameters for negotiations in farm and industrial goods and other areas, World Trade Organization (WTO) states had set themselves a new deadline of the end of July. Following are some key elements of the plan approved by the WTO’s executive General Council after five days of talks.

<B>Agriculture</B>

The pact says that export subsidies, widely viewed as the most trade-distorting form of farm aid, will be eliminated, although the timetable is left for future negotiations. Export credit programs and state trading enterprises will also be subject to disciplines to eradicate any element of subsidy.

On production subsidies, known as domestic support in WTO parlance, and mainly used by rich nations, the text calls for the most trade-distorting forms to be cut substantially, with product-specific capping of spending.

“Each member will make a substantial reduction in the overall level of its trade-distorting support from bound levels”, says the text. Significant cuts will be made in the first year of a final deal under the Doha Round.

The United States secured some easing of the rules for its so-called “counter-cyclical” payments to farmers, but with limits to assuage European Union and developing country fears that Washington might otherwise keep farm spending at current levels. The text also calls for a review of the so-called “Green Box” state aid to farming, devoted to programs such as rural development. The review will ensure that the rules are not being bent.

On market access, essentially import barriers, the text stops short of proposing a formula for a reduction but says there should be a “tiered” approach, with the deepest cuts for the highest tariffs.

After fierce pressure from developing countries, the text drops language which would have given rich farm importers, such as Switzerland, Japan and the EU a virtual free hand in identifying which products they could continue to protect with high barriers. It accepts rich nations have “sensitive” products but leaves the issue of how they will be identified for a later date.

For developing countries, particularly those where farming is mainly subsistence, there will be no obligation to grant much increased market access.

<B>Cotton</B>

West African states dropped a demand that cotton be treated as a separate issue. The text does give the crop special importance and says that it will be given “appropriate prioritization” and a special WTO panel will be set up to check progress in cutting rich nation subsidies.

<B> Industrial goods</B>

The basic aim of the agreement is to find ways to reduce import barriers to goods as varied as cement, shoes, chemicals and calculators. This will be done by a formula under which the highest tariffs get cut the most.

The text included a paragraph to allay some poorer country concerns they might have to cut tariffs too quickly. The new language says that while the blueprint “contains the initial elements for future work”, it adds that “negotiations are required to reach agreement on the specifics of some of these elements.”

In general, the least developed countries will not have to cut their industrial tariffs but will have to make them more transparent. Developing countries will also benefit from longer transition periods when making tariff reductions.

<B> Trade facilitation</B>

This is jargon for making customs procedures easier and less expensive for business. It was one of the four “Singapore Issues”, seen as making too great demands on poor nations and which finally caused the collapse in Cancùn.

The other three issues were jettisoned. The text includes much language intended to ensure that poor and developing countries adopt any new customs procedures when they are ready. Richer exporting nations got what they wanted in having negotiations on this area start at all.