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EU commissioner sees makings of trade deal

SHARM EL-SHEIKH, Egypt - European Union Trade Commissioner Peter Mandelson said on Monday he saw the makings of a global trade agreement in new proposals drafted to save the World Trade Organisation's Doha round.

As part of a new push for a breakthrough in the long-delayed negotiations, WTO mediators are expected to issue revised compromise texts early this week which could pave the way for talks by senior officials and by trade ministers within a month.

Mandelson told Reuters: "They contain significant new elements reflecting the substantial progress that we have made in negotiations over the recent period.

"I think that what we have on the table already is an outline deal which is worth at least two to three times in value to the global economy what was provided by the previous Uruguay round. I think the key trade-offs are there for us to make.

The Doha round is now in its seventh year having floundered on issues such as finding a compromise between poor and rich countries on how to lower border protections for farmers.

Many developing countries are also concerned about opening up their economies to more manufactured goods and services provided by powerful corporations in rich countries.

Without a breakthrough soon, the round risks further years of delay as the United States heads into a presidential election.

"I do understand the political difficulties and problems that we will still face," said Mandelson, speaking on the sidelines of a World Economic Forum meeting in Egypt.

These include the chronic dispute over U.S. domestic subsidies to farmers, which make food from other countries less competitive, and how far China, Brazil and India will go on cutting tariffs on industrial goods, he added.

Mandelson criticised an earlier version of the WTO mediators' proposals for allowing big developing countries to shield manufactured goods, such as chemicals, cars or textiles.

Food solution

Mandelson also said on Monday the Doha round was an essential part of solving the food supply problems which have come to light in sharp recent rises in grain prices.

"If we want to tackle the underlying causes of the food crisis, then we have to bring about a fundamental reform of agricultural trade in the world. The vehicle for doing that is the Doha talks," he said.

"If we fail in those talks then we will have missed a major opportunity to bring about that fundamental reform."

Answering demands for a ban on the production of fuels from agricultural products, Mandelson said biofuels had their place in reducing the carbon emissions which arise from burning traditional fossil fuels.

But the production process should be sustainable and should not displace food production, he added.

"There are countries which have such vast land masses that they could use that land for biofuel production without making any difference at all to food production," he said.

"We have to approach this with considerable prudence and considerable caution but it is possible to get biofuel production right," he added.

Egyptian President Hosni Mubarak called for a ban on biofuel production at the opening session of the meeting on Sunday in the Red Sea resort of Sharm el-Sheikh.