As World Trade Organization member countries gear up for the Sept. 10-14 ministerial conference in Cancun, Mexico, tensions between industrialized nations and their developing counterparts remain high over agricultural subsidies and other contentious topics.

The conference allows trade ministers to review their efforts since the last ministerial meeting in 2001, which was held in Doha, Qatar.

The Doha Declaration, or "Doha Round," which came out of the 2001 meeting, laid the groundwork for the negotiations that are currently under way and are set to conclude in 2005.

With some intermediate deadlines already missed, often due to differences between developed and developing nations, a successful Cancun meeting this month is seen as crucial in order to keep the Doha Round on track.

For the meeting to succeed, WTO member countries must agree on a broad framework for negotiations on agriculture, services and manufactured goods.

Thorny Agricultural Issues
One of the most contentious issues on the Cancun agenda is the possibility of changes to rules governing trade in farm goods.

In mid-August, the United States and the European Union developed a joint proposal that included cuts in some subsidies and import duties on agricultural products.

EU Director General of Trade Peter Carl said the proposal was intended "to demonstrate leadership."

"The negotiations were stuck. They had, for all practical purposes, been blocked since the end of last year," Carl said.

In response to the compromise, a group of 16 poorer nations -- including Brazil, India and China -- issued a counter-proposal calling on the WTO to force rich countries to cut import duties and farm subsidies, while making smaller demands on poorer nations.

Rich countries currently spend $300 billion per year on farm subsidies such as various forms of direct payments to farmers and price guarantees to farm products, according to a World Bank report issued about a week before the Cancun talks began. The United States pays out $50 billion annually to support its agriculture sector, the report stated.

U.S. Trade Representative Robert Zoellick told Washington trade lobbyists a week before the talks began that the United States was willing to make significant cuts in agricultural subsidies and tariffs at the heart of the trade talks in Cancun, but only if other countries made similar reductions.

Other Topics on the Agenda
An initiative from Benin, Burkina Faso, Chad and Mali proposing global elimination of cotton subsidies is also slated for discussion during the Cancun talks.

According to Bridges, a weekly trade news digest, the proposal seeks to ensure the survival and development of the West and Central African region's cotton sector.

Cotton accounts for 80 percent of export earnings in the West and Central African region, but the subsidies in rich countries have led to a decrease in export prices.

The proposal calls for the United States, European Union and others to reduce subsidies by one-third each year, until they are phased out entirely by December 2006.

Also on the conference agenda, Nepal and Cambodia will be added as members of the WTO. The organization will also determine where the Sixth Ministerial Conference will be held.

In a step forward for the WTO, its members resolved an issue that they had debated for years when they forged an agreement that allows poorer nations to import cheap versions of expensive patented drugs for diseases such as HIV/AIDS and malaria.

According to the old agreement, countries facing public health crises could order cheaper copies of patented drugs from suppliers, thereby overriding drug patents. However, they could only order from domestic manufacturers, which did not help developing countries without a domestic pharmaceutical industry. The new agreement, reached just two weeks before the Cancun meeting, will allow poor nations that are not able to produce their own cheap drugs to import them from other developing nations that do manufacture the drugs, such as Brazil and India.

"This is the one big ray of light," Nancy Birdsall, president of the Center for Global Development, a think tank that specializes in global poverty, told the Associated Press.

"This looks like a big advance and could open the door to more positive discussions in Cancun."

Possible Protests
As the debate continues over globalization's merits and flaws, the organization's critics will likely stage protests outside the Cancun meetings as they have at previous talks.

John Cavanagh, vice president of the International Forum on Globalization, a group that is holding a "teach-in" on alternatives to globalization the day before the WTO conference begins, told reporters some "street heat" is likely in Cancun. However, he said the protests will probably be much more peaceful than the Seattle riots in 1999, when protesters caused millions of dollars' worth of damage.

"You will likely have well over 10,000 primarily peasant and small farmer groups on the street, but in more peaceful protests," Cavanagh said in a telephone call with reporters.

-- By Sheryl Silverman, Online NewsHour