Richer countries are searching for weakness in a newly emerged alliance of poor nations pushing for cuts in farm subsidies they blame for helping western countries out-compete their own producers.

Developing countries, increasingly assertive within the 146-member WTO, also rejected European and Japanese demands on Thursday for new guidelines to govern overseas investment.
   
The agriculture debate has split the conference into a number of factional groups. While the US and the EU have pledged to work for the reduction of subsidies, they remain divided over how quickly change should be implemented.

Cairns group

Developing nations are pushing
for an end to subsidies

The Cairns group led by Australia and the Group of 21 developing countries headed by Brazil, China and India, are pushing for faster and more sweeping cuts in subsidies.

The United States on Thursday told two blocs of agricultural exporters that unless they eased their demands for a reduction of farm subsidies, the Cancun meeting could collapse. 
  
At a closed-door meeting, US Trade Representative Robert Zoellick asked countries that have bilateral trade accords with Washington to act as mediators with governments advocating a more measured elimination of subsidies.

Zoellick, while stressing the US was willing to liberalise its markets, said it would only do so if other nations agreed to do the same and poor countries cut import duties.

High risk

If poor countries refuse to accept US concessions and the EU's $100 billion farm programme, they run the risk of negotiations failing. That would result in them being saddled with the present subsidies until the issue is tabled again, possibly a couple of years.

Also blocking consensus are the Singapore issues, which involve investment, competition policies, trade facilitation measures and government procurement.

Japan, Canada and the EU are pushing for WTO negotiations over the liberalisation of investment restrictions, while their less well off colleagues contend talks held in the near future would be premature.

Developing countries are opposed to the formulation of WTO policies governing cross-border investment, saying that such an agreement would favour multi-national companies at the expense of their own.

The bickering reflects deep divisions that must be at least debated before Sunday, when the talks are scheduled to end.

Success, according to the World Bank, could help lift 144 million people out of poverty.