The United States, in an attempt to revive stalled trade talks and complete Doha round of WTO negotiations by its scheduled date of January 2005 , is currently taking several initiatives including a move that apparently amounts to breaking a deal with the European Union reached last year on the question of elimination of farm export subsidies.

The move has surpised the trade establishment of Europe but none of the key developing countries has welcomed it. In a letter sent to the trade ministers of the WTO member countries on January 11, US Trade Representative Robert Zoellick said he was taking a "common sense" approach to re-energise the talks and to avoid 2004 becoming a "lost year" for the Doha round as the 2003 had been.

He suggested reopening of talks on core market access issues in agriculture, industrial goods and services and said that a date should be set for the elimination of export subsidies.

This takes US back to its position of 2002, thus, abandoning the agreement reached in August 2003 on the eve of WTO fifth ministerial held in Cancun. In 2002, the US supported the eventual elimination of all trade-distorting subsidies and barriers to market access, at least publicly and as a matter of principle.

Robert Zoellick, who was in Islamabad last week to hold talks on WTO affairs and the proposed free trade and investment agreement, is currently on a whirlwind tour of important capitals to get the Geneva talks moving.

Since Cancun, the US has been pursuing a host of bilateral trade deals with several developing countries (a move designed to avenge Cancun's failure which the US thinks G-20 is responsible for) but most of them collapsed on the agriculture issue and even its major attempt to clinch an FTAA deal with Latin American countries also proved an utter failure early this month.

It was dubbed "a new Cancun". In India, he urged New Delhi to open its agriculture market which the latter flatly refused to do unless there was a breakthrough on agriculture.

The EU Trade Commissioner Pascal Lamy, reacting to Zoellick's initiative, said the EU was ready to show flexibility in a number of areas such as the Singapore issues and geographical indications, and, of course, on agriculture unless other member countries were ready to do so.

Lamy, whose major concern these days is reforming the WTO, says it is not enough for one or a few member countries to be flexible, meaning he does not fully share the US approach on subsidies.

He believes the decision-making in the WTO is the foremost problem and will remain a cumbersome, rather difficult, process as long as the one-member one-vote principle (essence of democracy) is not dropped - what a strange demand and that too from Europe.

Since Cancun, both the US and the EU have been too anxious to make the rest of the world believe that it was the developing world and its new alliances that were responsible for the failure of the fifth Ministerial.

Now Robert Zoellick and Pascal Lamy seem to have changed tactics to achieve an agreement on their agricultural framework. The new tactic, according to the Institute of Agriculture and Trade Policy (IATP), a US-based trade watchdog, is to make noises to exhibit their differences in the area of agriculture which is a familiar story to veterans of WTO negotiations.

Zoellick's letter shows there has occurred a split between the EU and the US on the question of elimination of all export subsidies, while the fact is that Zoellick consulted Lamy about the contents of the letter before releasing it, according to IATP. The two powers may not be as far apart as the letter would like to suggest, it said.

At the same time, Geneva-based delegates of the G-20 alliance complain that both the US and the EU are trying to influence them to adopt their framework for agricultural talks.

For the purpose, they are offering concessions to individual G-20 members and simultaneously putting pressure on them at the capital level to accept the US-EU approach. Recent visits of Lamy and Zoellick to various key trading countries have served this purpose.

At Geneva, the WTO Director General Supachai is doing his part by pressuring WTO delegations and officials in capitals to show flexibility. He has told some countries that he already has a new text for agriculture ready for discussion. But developing countries suspect this will simply be another push for the US/EU compromise framework of August 2003.

The G-20 members, it goes without saying, have welcomed Zoellick's efforts to revive the Doha Round negotiations but not his offer on subsidies. In truth, many G-20 members have a common interest with the US and the EU in wanting to liberalize agricultural markets but they remain sceptical until discussions enter a more substantial stage, so they can assess the quality of Zoellick's and Lamy's proposals. There is no denying the fact that agriculture remains the key to any forward movement in trade talks in all other areas.

Meanwhile, the US proposal, also outlined in Zoellick's letter, that the next ministerial meeting be held in 2004, instead of 2005, in order to keep up the momentum in negotiations has been rejected by the General Council of the WTO which met on February 11-12.

Reason: lack of consensus. Besides, Hong Kong, the host of the next ministerial, has conveyed regrets for an early arrangements. A formal decision was, hence, postponed until mid-year.

The General Council which held its first meeting of 2004 elected Japan's Shotaro Oshima its new chairman. This year it was the turn of the developed countries.

The US had suggested that the rotating chairmanship of the Council should again go to a developing country this year too and gave names of Brazil, Chile, Pakistan, Singapore and South Africa as potential candidates.

But the members did not agree to the proposal. Members also elected heads of several bodies and committees. They included Ambassador Manzoor Ahmad of Pakistan who will chair the special session of the TRIPs Council.

Interestingly, the GC did not elect chairmen of the working groups on the contentious Singapore issues as there was no consensus on the status of these issues among the members at the end of last year, and in this meeting as well.

The meeting also considered Iran's request for starting accession negotiations. The US opposed the request. But those who supported it included the EU, China, Cuba, Malaysia, India, Venezuela, Pakistan, Switzerland, Indonesia, Haiti and New Zealand.

They said Iran fulfilled all criteria for beginning accession negotiations. But no consensus could emerge. However, Iraq's request to sit as an observer at the WTO was accepted by the Council by a consensus.