New bid to salvage WTO trade deal

WTO chief Pascal Lamy has warned a trade deal is in crisis

Trading powers are holding talks in Geneva aimed at pushing forward with a deal on global free trade.

Ministers from the US, Europe, Brazil, Australia, India and Japan hope to agree a way to boost trade in industrial and agricultural goods.

If the negotiations fail, World Trade Organization (WTO) members risk missing an end of year deadline for setting out the details of a trade treaty.

The talks will be followed by more discussions later this month.

Previous meetings aimed at moving the so-called Doha round of trade talks have been delayed by a key sticking point between developing nations and the US and EU.

Developing nations want Europe and US to lower farming subsidies and tariffs, while the Washington and Brussels want greater access to manufactured goods markets.

Deal warning

Negotiators have warned that if the current talks fail to make a breakthrough there may be little need for further discussions on 28 and 29 July.

"It is difficult to imagine that we can continue coming here without anything happening," EU Agriculture Commissioner Mariann Fischer Boel told Reuters.

The meeting in Geneva is the latest in a long line of "last ditch" attempts to save the trade treaty.

Earlier this month, similar talks in Geneva fizzled out without a deal, prompting WTO chief Pascal Lamy to warn the negotiations were "in a crisis".

However, at follow up talks in Russia involving leaders of the G8, the leaders of the industrial nations set a target date of mid-August for a breakthrough in the key issues of farm and industrial goods.

Offer rumours

Speculation has also been rife that the US and EU are close to cutting deals to ending the Doha deadlock.

Reports suggest the US could slash its farm subsidies, while the EU has already said it is prepared to move closer to the 54% cut in agricultural tariffs demanded by poorer nations.

Timing is crucial to the negotiations - which are already long over their original 2004 deadline - with a deal needed by the end of the year.

If no agreement is reached by 2007, the special authority US President George Bush has to negotiate trade deals will expire.

After that it will be harder for him to get congressional approval, and if the US cannot deliver on whatever its negotiators might agree, other countries will not want to either.