Agriculture is an issue where new talks have to begin under previously agreed rules, irrespective of whether a new millennium round of trade liberalisation talks is launched here in Seattle or not.

However, the two trading giants, America and the European Union are so far in a head-on clash on agriculture. The matter is simple enough. The EU is a huge subsidiser of its farmers and the US and several other countries, including India, are saying that this has to change.

The EU (and Japan, another protectionist country on farm trade) are saying that agriculture inspires a lot of non-trade concerns such as the preservation of small rural communities and cannot be treated like any other sector in trade matters.

The EU calls this multifarious aspect of farming"multifunctionality". The disagreement was about a reference to this multifunctionality. America said it is enough that existing WTO rules allow for flexibility in liberalisation on concerns such as public health, environmental safety, etc.

To stall pressure to eliminate its farm subsidies, the EU is also demanding that the US should give up its farm export credits and other countries should give up cross-subsidisation of farm exports through state trading corporations.

The EU also argued that it would agree to drop its insistence on agriculture's multifunctionality only if talks proceed in another area where it is keen to see a new WTO agreement: multilateral rules on investment.

India, which is a bit player in this battle of the giants, is for now watching from the sidelines. It has made known its concerns about food safety which it says could be jeopardised by drastic opening up of its farm sector to trade.

This view has been respected in the present draft declaration on the matter. But if the USand the EU fail to resolve this most contentious issue (aside from trade and labour standards opposed by developing countries), it could end in serious deadlock for overall trade talks here, not just in agriculture.