Police hoped to avoid a re-run of the Seattle riots

Brazil has threatened to block attempts by the world's two largest trading blocs, the EU and the US, to bar complaints over their huge subsidies to farmers in the World Trade Organisation (WTO).

The two trade blocs have had a "peace clause" in effect until the end of the year as tense negotiations continue over how to cut the support given by rich nations to their agricultural sector - support which many developing countries believe undermines their efforts to improve their economies through trade.

Now Brazil, one of the world's biggest agricultural exporters, has objected to a proposal to extend the peace clause.

"We have paid a very high price for that clause, and developing countries will not approve its extension," said Gilman Vienna Rodrigues, who represents Brazil's farmers.

Brazil was speaking for the Cairns group of agricultural exporting nations, which include Argentina, South Africa, Australia, and Canada, the host of the meeting.

The Montreal meeting is being seen as the last-ditch attempt to reach agreement before ministers from all 146 WTO members meet in Cancun, Mexico to try and finalise a world trade deal that will benefit developing countries.

The trade talks were launched in Doha, Qatar, in 2001.

Protesters

On Monday, several hundred anti-poverty protesters gathered outside the conference venue which was protected by riot police.

Police said they arrested at least 100 demonstrators after shop windows were broken.

Some protesters attacked branches of the Gap clothing firm and Burger King fast food chain, two of the international brands activists accuse of exploiting workers in poor countries and driving local producers out of business through unfair trade.

Deadlines slipping

September's Mexico meeting is due to bring together trade ministers from 146 countries for talks on trade liberalisation but deep differences remain about key topics on the agenda.

Protestors accuse the WTO of favouring rich nations

WTO deadlines have already been missed for settling how the Cancun meeting will tackle the two most contentious issues, agricultural subsidies and poor nations' access to cheap medicines.

WTO director general Supachai Panitchpakdi urged trade ministers on Monday to show "more flexibility".

"We need country members to be prepared to talk about compromise," he said.

Agriculture deadlock

Little progress has been made towards a reform of agricultural subsidies, as the United States, EU and developing countries all have different reasons for rejecting the draft proposals.

WTO agricultural committee chairman Stuart Harbison proposed a 60% cut in agricultural subsidies over five years.

US negotiators say the proposal would favour the EU, while the EU has criticised the cuts as too steep, although analysts say it has moderated its position since its internal agricultural reforms.

Developing nations say the Harbison plan does not do enough to stop industrialised countries dumping their farm products and destroying markets for poorer farmers.

The original deadline for agreement on agricultural trade issues was March 2003.

US-EU talks

Commissioner Pascal Lamy met the US trade representative Robert Zoellick in Montreal on Monday, causing concern among other negotiating countries.

The meeting follows talks between Mr Zoellick and US Agriculture Secretary Ann Veneman with EU Agriculture Commissioner Franz Fischler on Sunday.

"What everyone wants to know is what they are talking about," said Canadian agriculture minister Lyle Vanclief.

But US trade representatives said that reaching agreement among the two big blocs was a vital pre-requisite to a final deal among all 146 WTO members in Cancun.

An end-2002 deadline for an agreement on how to modify patent treaties to allow poor countries to import cheaper, generic copies of drugs, particularly those for HIV/Aids, has already slipped.