Time running out for deadlocked trade talks

GENEVA (Reuters) - Deadlocked global trade talks will failunless countries can find compromise in the coming hours, thechair of WTO negotiations said on Friday.

"The situation is critical, edging between success andfailure," World Trade Organisation chief Pascal Lamy tolddelegates at the Geneva talks, according to his spokesman."Time is running out and the next 24 hours are crucial."

Trade ministers from around the world have made littleprogress since talks began on Monday aimed at saving thelong-delayed 'Doha' trade round which seeks to liberalise tradeby reducing import tariffs and trade distorting subsidies.

A group of seven ministers representing the world's majortrading blocs was reconvened for talks that European TradeCommissioner Peter Mandelson said were a chance for "one finalattempt to close the gaps".

"It's a crucial day," Mandelson said as he arrived at themeeting. "If some, certain people who are negotiating will notshow any flexibility at all then it takes the rest of thenegotiation hostage."

Delegates said they would know soon after that meetingwhether the talks would fail. However the timing of any outcomeon Friday remained impossible to predict.

STRETCHING

Emerging economies like Brazil and India have criticisedthe United States and European Union for failing to offer bigenough cuts in subsidies and import tariffs which make itharder to compete with American and European farmers.

Washington and Brussels both say they have given ground inthe talks and are waiting for the developing countries to makeconcessions on opening their markets to imports of manufacturedgoods and services.

"Let's put it this way: some countries are stretching morethan others and we'll see tomorrow whether everybody isprepared to do their share," U.S. Trade Representative SusanSchwab said on Thursday night.

Industry associations from Argentina, India and SouthAfrica issued a joint statement warning that current proposalsin the talks risked damaging key sectors in their countriesthat were major providers of employment.

French President Nicolas Sarkozy, who has often said EUfarmers have already given too much, said he would not sign upto the proposal currently on the table.

The Geneva meeting of trade ministers from some 35countries is seen as the last chance for the Doha round, longdelayed since its launch in 2001.

If no outline agreement can be reached, the liberalisationplan is unlikely to be concluded before the end of the year bywhich time U.S. elections could halt talks for months or years.

Lamy has said a successful deal would inject confidenceinto a global economy beset by soaring fuel and food prices andthe credit crunch, while failure would encourage protectionistsentiment and call into question the international community'sability to tackle problems like climate change.

Urging ministers to make one final effort, Lamy said: "Theworld outside will not understand if we fail to grasp thisopportunity to conclude a round that already has a great dealon the table and promises much more."