World trade talks open amid deadlock, protests

HONG KONG, Tuesday (Reuters) - Ministers from around the world gathered in Hong Kong on Tuesday to push forward deadlocked talks on a free trade pact that could boost global economic growth, while protesters took to the streets hoping they would fail.

Thousands of anti-globalisation protesters were expected to march through the heavily policed streets of this territory - which ironically owes much of its prosperity to international commerce - as the World Trade Organisation (WTO) talks opened.

About 50 South Korean farmers and fishermen made an early start in the island's Victoria Park, warning against cuts in subsidies and import tariffs that could expose their long-protected industries to global competition.

Wearing jackets that read "No drastic tariffs cuts", they pumped their fists into the air and shouted "Protect Korean agriculture groups!"

The protesters shared the park with elderly people doing Chinese tai chi morning exercises and joggers, but police officers stood at a distance.

South Korea's farmers are among the most militant anti-trade activists in Asia and have a reputation for violence. But Hong Kong has put some 9,000 police officers, roughly one-third of its force, on duty to avoid a repeat of the violence that marred previous trade meetings in Cancun and Seattle.

The Hong Kong meeting had originally been billed as the last hurdle before an agreement on the Doha trade round, which in theory could lift millions of people out of poverty and inject new zest into the global economy.

The nearly 150 countries of the WTO still hope to reach a final deal by the end of 2006. But, bitterly divided over how far to open their farm, services and factory goods markets to more trade, they gave up weeks ago hopes for a blueprint in Hong Kong.

The European Union has faced intense pressure to make deeper cuts in agriculture tariffs than the average 39 percent it has offered. But it has refused to budge without balancing pledges from developing states to open their markets to industrial goods.

French Trade Minister Christine Lagarde, whose country is often depicted as the villain of the piece, sought on her arrival in Hong Kong to lay the blame at the door of poorer nations.

"It is time that the EU's main partners stopped hiding their game and expressed clearly their wish to succeed in Hong Kong," she said in a statement. "I call on emerging countries to engage in discussions on industrial products and services."

EU Trade Commissioner Peter Mandelson also tried to move the spotlight away from Europe's long-protected farmers, telling French LCI television on the eve of the talks: "We can't have an agreement simply by putting agriculture on the table".

He said the meeting would not be conclusive but it would "allow us to move forward", and indeed major trading powers arrived in Hong Kong promising to help poorest nations win a bigger slice of world trade.

Egyptian Trade Minister Rachid Mohammed Rachid, chairman of the WTO's Africa Group, was due to tell the conference that there could be no real progress in Hong Kong unless development took centre-stage in all negotiations.

"Development cannot be deferred ... to the last meeting at the end of the round. Leave development to the end and you risk another Cancun," he said in a statement, referring to the acrimonious breakdown of Doha round talks in 2003.

He said that rich nations are too focused on market access as the key to overcoming poverty through trade, but what developing nations need most is help in building their capacity to trade.

Japan announced ahead of the talks that it would provide $10 billion in trade-related aid to least-developed countries, and the EU has called on all industrial nations to offer unrestricted access to products from the world's poorest.

"Japan's proposals are similar to those proposed by the European countries ... that a package of measures for development be adopted right here in Hong Kong," Lagarde said.