World trade talks have grounded to a halt in Hong Kong, even moved backwards, as bickering continued between farmers in the rich Western countries and impoverished Third World.

Developing countries have threatened to reject any deal at the World Trade Organization that fails to protect their cotton, banana and sugar farmers, a stand that the Associated Press said could ruin chances for a successful outcome to the talks.

"It is hard to see where progress can be achieved in Hong Kong if the talks continue in this direction," European Union trade commissioner Peter Mandelson told the news agency on Friday. "The level of ambition, if anything, is going backwards."

Ontario farmers protest low incomes last March
Ontario farmers protest low incomes last March

World trade leaders have been meeting since Tuesday in an attempt to cut trading barriers in three main areas: agriculture, manufactured goods and services. But progress has been slow, if not backward, Mandelson said.

Since the 149-country WTO operates by consensus, the impasse could undermine the outcome of a conference that ends Sunday.

Warning that trade talks risk failure, a broad group of countries including India, Brazil and Australia urged fellow trade delegates to refocus on resolving the core issue of farm trade, where talks have stalled for months.

The latest difficulty arose Friday when the Group of 77 African, Caribbean and Pacific countries demanded safeguards for their commodity growers and continued preferential access to European markets. Many of these countries have subsistence farmers who rely on sugar, cotton and bananas.

"We will not be a party to any consensus that does not recognize our right to grow bananas," said Charles Savarin, Dominica trade minister. "We must preserve our traditional access to the EU markets."

The EU's tariff system favours Caribbean and African banana producers over large-scale growers in Latin America, an arrangement that irks Central American countries.

To complicate matters, the United States and the EU have failed to offer meaningful cuts to their farm supports, irritating developing countries, which say that Western farm subsidies and tariffs block their access to lucrative markets.

"We are going to stick to our position," Mandelson said, adding that developing countries want the EU to make concessions in industrial trade and agriculture. The United States has offered to cut its farm subsidies by 2010. But developing countries say that offer is hollow.

The United States and Japan both had cited concerns: Washington about textile imports from Bangladesh, and Tokyo about rice imports.

In a modest sign of progress at the meeting, negotiators agreed on a draft text for a package that would give 32 of the WTO's least-developed countries duty-free, quota-free market access, officials said. But the revised draft includes no specifics on when the measures would be implemented or what products would be covered.

Meanwhile, protesters scuffled with police outside the U.S. Consulate in Hong Kong, throwing eggs at the building and covering it with graffiti. Demonstrators have been protesting daily since the WTO talks began, but activists haven't caused the sort of chaos and damage that marred past meetings.