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02:29 GMT, Tuesday, 29 July 2008 03:29 UK

Bid to salvage world trade talks

Negotiators gesture during at WTO session

Negotiations aimed at rescuing a deal to liberalise world trade are going into a ninth day after delegates failed to resolve deep differences.

A spokesman for the World Trade Organization said the talks in Geneva had reached a "very tense" stage.

The US accused China and India of insisting on too much protection for their farmers and industries.

Sources close to the negotiations say that if progress is not made soon the talks could collapse.

Backing out

Discussions which continued late into Monday night failed to resolve a dispute that has put a deal in serious doubt.

The BBC's Theo Leggett in Geneva says the future of the "Doha round" - launched in 2001 - depends on the extent to which developing countries can protect vulnerable industries from competition if imports rise to harmful levels.

"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life"
David Shark, US trade official

Q&A: Crunch trade talks

The dispute has pitted India and China against the United States.

On Monday US trade official David Shark criticised India for rejecting the package and China for backing out of the terms it agreed to last week.

He accused them of being overly-protective towards their own farmers and failing to do enough to open their markets.

"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life," Mr Shark said.

China hit back by saying that rich nations were pushing developing countries into special deals on certain sectors while reserving the right to protect sensitive agricultural products.

India's envoy, Ujal Singh Bhatia, told AFP news agency that the US accusation was unfair and that the US only made the claims because it was "not achieving its aims".

India insists Washington is promoting the interests of rich countries at the expense of efforts to combat poverty.

Bananas

Meanwhile nine European Union countries led by France are demanding greater access to developing countries.

France said the deal being worked out in Geneva was unacceptable, as it failed to show any real progress to protect European industrial interests in the face of emerging economies.

Indian farmer

Talks appeared on the brink of collapse last week but WTO chief Pascal Lamy was able to broker a proposed settlement between seven key trading nations late on Friday.

The deal calls for cutting the limit on European farm subsidies by 80% and US payments by 70% to about $14.5bn (£7.25bn).

However, this would not mean the US would have to cut its actual spending on support to farmers, which totalled about $9bn last year.

The compromise proposal also involves cuts in tariffs on agricultural imports and on industrial goods.

It also involves the EU offering 80,000 temporary visas a year for working in the services sector.

In another area of contention, former European colonies have threatened to block a trade deal to reduce the EU's controversial tariffs on Latin American banana imports.

The African, Caribbean and Pacific (ACP) trade grouping said the 35% cut agreed by EU and Latin American officials on Sunday was unacceptable.

EU officials have been trying to review the special trade deals with about 80 ACP countries, which have been in place since the 1950s.

These deals have allowed a range of products, including banana crops from ACP states, to enter the EU with no duty to pay, while Latin American exports were charged.




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