HONG KONG (AFP) – Trade ministers reached compromise yesterday on key hurdles to achieving substantial global trade reform in 2006, attempting to break the deadlock with a deal to eliminate farm trade export subsidies and provide special breaks for poor nations.

World Trade Organisation (WTO) delegates approved a document here providing for European Union agricultural export subsidies to be scrapped by 2013, a key stumbling block which the United States and developing nations had wanted removed in 2010.

Anti-poverty campaigners condemned the agreement as a betrayal of the poor but ministers from the main trading blocs welcomed it as a modest step forward which could pave the way for an overall trade liberalisation accord in 2006.

“We are tipping the balance in the WTO back in favour of the developing countries,” said WTO Director-General Pascal Lamy after the agreement was finally approved following six gruelling days of negotiations.

“You have put the round back on track, you have given it a sense of urgency,” Lamy said, referring to the Doha Round of trade negotiations launched in Qatar in 2001.

With the round due to end at the end of next year, Lamy said another ministerial meeting would be held in April.

The Hong Kong agreement on export subsidies did not affect the EU’s much-criticised Common Agricultural Policy (CAP) programme of domestic subsidies, which accounts for 40 per cent of the trading bloc’s spending.

Anti-poverty group ActionAid estimated it would result in EU subsidies being cut by euro1 billion (US$1.2 billion), compared to the euro55 billion spent on the CAP.

“All told, it’s been a good week,” EU Trade Commissioner Peter Mandelson said after the deal was approved.

In Paris, French President Jacques Chirac welcomed the deal, saying it would boost economic growth and jobs in his country, contribute to development in poor countries and “preserve the necessary potential of European agriculture”.

US Trade Representative Rob Portman said the compromise was about “making clear to the developing countries that they have a stake in the round”, adding: “There’s still a lot of work to do.”

However anti-poverty campaigners were not so positive.

“This is not a deal, it’s a fraud,” the head of ActionAid’s trade justice campaign Aftab Alam Khan told AFP.

Oxfam’s trade campaign chief Phil Bloomer said rich countries had conceded minimal access to their agricultural markets while opening up the sensitive industrial and services sectors of developing nations.

“This is a profoundly disappointing text and a betrayal of development promises,” Bloomer said.

Agreeing on a date to scrap the subsidies, which critics say prevent farmers in poor countries from competing effectively on world markets, had been one of the trickiest issues at the meeting.

The Hong Kong document is intended to guide ministers in further negotiations, with the goal of approving a final trade liberalisation deal and completing the current round of negotiations by the end of 2006.

As officials talked, the harbourside conference centre was totally sealed off, with police out in force to prevent more rowdy anti-WTO protests after clashes on Saturday in which 116 people were hurt, according to authorities.

More than 1,000 people were detained, according to Hong Kong police. Nearly 200 of them had been released as of late yesterday.

The violent scenes were highly unusual for Hong Kong and were not repeated during a protest on yesterday that drew 6,000-7,000 people, conducted amid a heavy police presence.

On the divisive issue of cotton, the WTO text said all developed country export subsidies would end in 2006 while the poorest producers would get duty-free and quota-free market access once an overall accord was agreed.

Crucially, no date was given for an end to these domestic subsidies.

On trade in industrial goods and services, where the developed world wanted progress in exchange for removing its farm trade export subsidies, the document sketched out a formula for cutting tariffs but left it to be finalised.