Page last updated at 15:10 GMT, Tuesday, 25 July 2006 16:10 UK

Leaders cling to trade talk hopes

WTO chief Pascal Lamy
WTO chief Pascal Lamy says talks are in suspension

The US and the EU have blamed each other for the deadlock in world trade talks as leaders struggled to find a way to revive the stalled negotiations.

World Trade Organization head Pascal Lamy rejected the idea that the talks had collapsed on Monday and insisted they were merely in "suspension".

EU trade commissioner Peter Mandelson said he would "push hard" to restart the Doha Round of negotiations.

But the US accused the EU of "false and misleading" efforts to divert blame.

After five years of talks, disagreement over agricultural subsidies and tariffs caused the Doha talks to be suspended in Geneva.

Brussels blamed US inflexibility, while the US said Europe failed to match its promises in opening up its markets.

'Time out'

"If the consequences are clear to them...then I think that the American, European and Japanese negotiators could return, with positions a bit more compatible," said Mr Lamy.

Speaking on French radio station France-Inter, Mr Lamy drew a parallel with sport, saying: "It is like in basketball, a time out."

Developing countries would be the worst hit if trade talks failed, said Mr Lamy.

But he added that European consumers would also be negatively affected, because prices would remain higher than necessary.

Blame game

For his part, Mr Mandelson blamed the US, saying it had shown "no flexibility" on the issue of domestic subsidies for agriculture.

Washington hit back at accusations that it was not willing to negotiate and said that such criticism "could not stand uncorrected".

US negotiators accused the EU of backsliding on its agricultural liberalisation proposals by introducing further loopholes, "while at the same time insisting on the right to lavish more than twice as much trade-distorting subsidies on its farmers" as the US.

Leaders in South Korea and India expressed regret about the collapse of the talks, and said that they would now put more emphasis on negotiating bilateral trade deals.

Indian trade minister Kamal Nath said he was considering free trade deals with the EU and Japan.

Regional deals

Mr Mandelson said he was planning a "new agenda" to discuss more open trade with China and other developing economies in October. However, there are as yet no plans to meet with other trading partners before then.

Although disagreement persists in areas including trade in services, Mr Mandelson said it should be possible to reach consensus on aid and trade for the poorest developing countries.

However, Mr Lamy has said the Doha round, billed as the "development round", will certainly not be concluded this year.

Pressure to reach a deal has been mounting, as US President George W Bush's special "fast-track" authority to negotiate trade deals expires next year.

After 30 June 2007, Trade Promotion Authority will expire, giving the US Congress the right once again to change such agreements.

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