Europe and Japan were the major stumbling blocks in resolving the stalled World Trade Organisation (WTO) negotiations, Trade and Industry Minister Alec Erwin said in Cape Town yesterday.

Addressing the media after a meeting with US trade representative Robert Zoellick, Erwin said that the "more difficult negotiations" would take place with Japan and Europe.

"Yes, Europe is the more difficult party on agriculture issues ...Japan as well".

Zoellick said the US was willing to eliminate export subsidies, provided that Europe and Japan would do the same.

WTO talks stalled in Cancun, Mexico, last year when countries failed to agree on key points such as subsidies on agricultural products and tariffs on goods.

He said that the US was willing to use its influence to get Europe and Japan to open their markets.

"We are willing to take significant cuts in the domestic subsidies if we can get Japan and Europe to cut as well. The key has always been Europe and Japan subsidies ... also getting a fair shot at developing countries".

Zoellick, who is on a global two-week tour to promote WTO trade talks said the other challenge was getting countries with very different viewpoints to agree.

"We have an enormous challenge of bringing 148 countries together. We are trying to put direction on the things we concluded at Doha, but we must also respect the views of others".

Erwin said it was significant that Zoellick has taken the initiative that he had.

"It is important that we have a major trading nation giving leadership. There are various areas that we can make progress. We should be able to try to find a way to drawing up a framework within this year".

Zoellick said the new framework agreement would include agreements on trade facilitation and tariffs on goods and services.

"The framework that was put together in Cancun was in my view rather close to what most countries want".

He said the text of the Cancun agreement moved towards cuts in tariffs and export subsidies.

"In agriculture one of the core elements is export subsidies, which we feel should be eliminated. You are subsidising people to grow things and then subsidising them to buy things. We have to wrap all that together... if we can get key countries to commit". – Sapa.