U.S. farm programmes spared as WTO talks collapse

By Doug Palmer

GENEVA (Reuters) - A new $289 billion (146 billion pounds) U.S. farm bill, which has survived two veto attempts, was spared again on Tuesday when nine days of intense efforts to rescue a world trade deal ended in failure.

"It's no use beating around the bush, this meeting has collapsed," World Trade Organisation Director General Pascal Lamy told reporters on Tuesday. "Members have simply been unable to bridge their differences."

Trade ministers representing around 30 key WTO players were in Geneva to try for a breakthrough on farm and manufacturing trade issues at the heart of the world trade round launched nearly seven years ago in Doha, Qatar.

Tuesday's failure could delay an agreement in the talks for two or more years because of the upcoming U.S. presidential election and other international leadership changes.

U.S. Trade Representative Susan Schwab faced pressure from Congress to insist on new agricultural export opportunities in developed and developing countries to offset any farm subsidy cuts the United States would have to make.

EU Trade Commissioner Peter Mandelson said the European Union, in contrast, had "never sought to be paid for reform of our farm subsidies by receiving market access in developing country farm markets" and looked instead for gains in foreign manufactured goods and services markets.

Early last week, Schwab offered to cap annual overall U.S. spending on trade-distorting farm subsidies at $15.0 billion, down from $48.2 billion under current WTO rules.

A compromise package proposed by Lamy set the ceiling at about $14.5 billion, but India and other developing countries said that was still twice current U.S. spending levels because of high commodity prices.