Trade ministers at the World Trade Organization's (WTO) Hong Kong summit are struggling today to reach a compromise deal on the vexed question of cotton subsidies that will prevent West African exporters from scuppering an overall agreement.

The US has been under pressure to abandon its production payments to American growers, which are highly politically sensitive in the US.

As a result, US Trade Representative Robert Portman has been offering the West Africans a development package to improve their cotton industry competitiveness, noting: "The yields in Africa are one half the yields in the rest of the world for cotton", and adding: "It would be very, very irresponsible to them to tell them that (removing foreign) subsidies is going to solve their problem".

As for the subsidies themselves, the EU has accused the US of tying an offer to reduce cotton payments to Brussels "meeting their demands on agricultural market access" in general. This, said Mandelson, "takes tactical negotiation to fresh heights", adding "they (the US) are putting up a smokescreen to dodge commitments made (on cotton) in 2004".

The linkage threatens to complicate discussions, because of the intransigence of some EU countries on food liberalisation. Ministers were today meeting with officials to thrash out a first communiqué draft for the summit, scheduled to end Sunday.

By Keith Nuthall