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North-South Divide Remains Fault Line in Approaching World Trade Summit

Just days remain until the start of international talks viewed as pivotal to the future of global trade. Negotiators from 149 nations will try to rescue a four-year-old consensus on market liberalization goals, but a rift between so-called "North" and "South" nations could produce a potentially fatal collapse in the talks. The issue of agriculture is likely to decide whether North and South can see eye to eye.

Angry farmers clogged streets in downtown Seoul at the end of November, to denounce a plan for opening South Korean markets to imported rice. They say the plan, which is part of an agreement made through the World Trade Organization, will destroy their livelihoods by dumping subsidized rice from the United States into the market.

South Korea is an advanced economy, belonging to nations the WTO characterizes as the developed North. However, the complaints of South Korean farmers resonate loudly in the less developed nations of Africa, South America, and the Indian subcontinent - commonly referred to as the South.

Critics say that by heavily subsidizing agricultural exports, the United States and the European Union dump artificially cheap goods onto developing world markets - basically steamrollering local producers out of business.

The agricultural issue is one of the main obstacles to freer trade goals that the 149 WTO member nations face at their Hong Kong ministerial meeting.

Jeff Atkinson, with the "Make Trade Fair" campaign for the international humanitarian group Oxfam, says the North-South divide over agriculture reflects a broader set of North-South double standards, which threatens the WTO's credibility.

"The northern countries are very strong, pressuring southern countries to open their markets, to liberalize, but very reticent to open their own markets, to liberalize themselves," he said. "So there's a high level of hypocrisy going on there."

South Korea is an example of this. It grew wealthy by exporting millions of tons of manufactured goods to the rest of the world, but many of its markets have been protected. Its farmers receive hefty state support, and very little foreign rice is allowed in - whether it is from the subsidized U.S. farmers, or from poor farmers in Thailand, where production costs are low.

WTO Director-General Pascal Lamy acknowledges there are elements of the organization that need to be "rebalanced" through negotiations.

"There are some rules in our present system that I believe are unfair to developing countries, yes," he said. "And, I mean, given that the membership of WTO is two-thirds developing countries, there is no way we can reach positive results in the round without this being seriously and totally factored in."

United States Trade Representative Robert Portman says Washington is ready to make concessions to get more liberalization.

"We are both offensive and defensive in a lot of these areas - by the way, including in agriculture, where we have our own protections in place that would have to be dismantled, in addition to our subsidies that we have offered to put on the table," he said.

Mr. Portman joined other senior trade officials here in South Korea last month in urging the European Union to lower its agricultural market barriers. However, he agrees with European Union demands that less developed nations be more willing to import industrial goods and services such as banking and insurance.

"It all needs to come along together," he said. "We also need to see progress in the other areas where the European Union has a strong commercial interest, as does the United States."

Some activist groups rule out a Hong Kong deal altogether. They say the WTO is inherently unfair to developing nations, and should be scrapped.

Walden Bello, director of Focus on the Global South, is waging a multi-media campaign to "Derail the WTO."

"In Hong Kong, we're out to try and derail the WTO for the third time - and hopefully, this will permanently cripple that organization as a mechanism of trade liberalization and the expansion of the corporate agenda," he said.

Mr. Atkinston at Oxfam does not go that far. He says the world needs a global framework of rules, which the WTO can provide - but those rules have to allow nations of the South to catch up to nations of the North at their own speed.

"So what we're calling for is flexibility and policy space," he added. "What we're concerned about is that the pace is being forced to far and too fast on these [less developed] countries."

Experts warn the WTO could indeed suffer a traumatic blow if the Hong Kong conference does not make progress toward a deal. While it remains unclear whether key agricultural concessions will be made, there is near-unanimous agreement that negotiations will last until the very final late-night seconds of the meeting tick away.