The WTO chief promised a development agenda

Trade ministers from 25 countries have gathered in Canada to try to resolve deep differences over agriculture between Europe, the US, Japan and the rest of the world.

"There are signs of progress," Canadian spokesman Sebastien Theberge said following Tuesday's meetings.

If the arguments over farming subsidies are not settled, the chances of the 146-nation meeting in September making progress on medicines and other issues vital for developing countries are close to zero.

Although agreement is still far off, there are indications that entrenched positions - particularly those of the US and the EU - are beginning to shift.

"It's going to require an immense effort (to reach an agriculture deal), but I think on the basis of what we've seen today ... we're still in the game," World Trade Organization spokesman Keith Rockwell told reporters.

Contrasting messages

Europe is offering some cuts on farm subsidies and bigger import quotas on some products, and says it is "cautiously optimistic" that it and the US can reach some sort of a rapprochement.

Security is still tight in Montreal

The basic positions of the EU and US remain far apart, with Europe looking for across-the-board proportionate tariff cuts and the US showing no signs of backing away from setting a single, low level to which everyone would have to meet.

Unsurprisingly, each proposal is tailor-made to cause the least pain to the proposer's own farming business.

But the two will have to reach an agreement if they are to get other things onto the agenda, such as rules on protecting their firms' investment in foreign countries.

Bigger agenda

Many developing countries regard these as a step too far, seeing in them a free pass to multinationals and a ticket to blocking their control over their own economies, and may try to keep them off the table.

"The developing country point of view is that they need to be very selective in where they can bring down... barriers," one WTO official told Agence France-Presse.

"They need to protect industries that are in their infancy to give them a period of time to adjust to global competition, so that's the central debate at the moment."

In the background, demonstrations by anti-globalisation protesters continued on Tuesday, albeit on a more restrained level than on Monday, the first day of the meeting.

Some 140 activists were scheduled to appear in court having been arrested the day before, and three more arrests were made on Tuesday.