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WTO talks face collapse

GENEVA - WTO head Pascal Lamy warned on Friday that talks on a global free-trade pact faced collapse as leading nations searched here for a way to break a seven-year log jam.

"We need to change gears very quickly to turn things around," Lamy was quoted as saying by his spokesman

Beginning a fifth day of meetings, diplomats and negotiators said that Friday would be make-or-break at the end of gruelling week of bargaining at the World Trade Organization which has produced scant evidence of progress.

"The situation as I see it is critical, edging between success and failure," said Lamy, who called the meeting of leading trading nations this week in what was a high-stakes attempt to finally broker a deal.

"Some convergences have been recorded but progress remains painfully slow after four days of ministerial negotiation," Lamy told delegations from the 153 members of the WTO in a morning meeting, his spokesman said.

"It's a crucial day," said European Union Trade Commissioner Peter Mandelson as he arrived for talks with a small group of leading nations composed of the US, the EU, Japan, India, Brazil, Australia and China.

"We have to see flexibility from people to enable us all to move forward. If certain people who are negotiating will not show any flexibility at all then it takes the rest of the negotiations hostage."

Ministers from 35 leading economies are meeting to discuss reductions in subsidies and import tariffs with the aim of mapping out a deal to conclude the long-delayed Doha Round of global trade talks.

The Doha Round began seven years ago with the aim of helping poor countries enjoy the fruits of freer global trade but the process has been delayed by disputes between the rich developed world and poorer developing nations.

The two sides have settled into a familiar pattern of demanding concessions from each other and refusing to budge until new offers have been put forward.

Such brinkmanship has led to the collapse of talks an several occasions since the Doha Round began in the Qatari capital in 2001.

Brazil's trade negotiator, Foreign Minister Celso Amorim, told reporters: "Yesterday was crucial, today is crunch time."

Any final deal, if approved by negotiators here, would still need to be cleared by all 153 WTO member states.

Norwegian Foreign Affairs Minister Jonas Gahr Stoere stressed to AFP that as long as ministers were continuing negotiations it was a positive sign.

"As long as the ministers are in town, there is an opportunity of striking a deal," Norwegian Foreign Affairs Minister Jonas Gahr Stoere told AFP.

But he added that on "critical issues, distances (between the parties) are wide ... Until there is some movement on these, we are not there."

Lamy's spokesman, Keith Rockwell, said that ministers had indicated they were ready to stay longer into next week "if they had indications today that there was progress that would make that worth their while."

One diplomat who declined to be named said there has been little positive coming out of the talks so far this week -- except the fact that discussions were still ongoing.

"It has been dark. The only unknown is whether this darkness would lead to a deeper abyss of darkness or if there is light beyond the darkness.

"As it is so often with such negotiations, it is only at the last minute when a breakthrough can be wrought. We'll see," he told AFP.

The only sign of public movement in the negotiations has been offers from the EU and the US on agriculture, but these have been dismissed by developing cocuntries as inadequate in the case of the US and nothing new from the EU.

On Tuesday, Washington offered to cut two billion dollars from its annual aid for farmers to leave it at 15 billion dollars -- a move greeted by key developing economy India as welcome but still inadequate.

The United States and the EU have in turn asked key emerging economies to give ground on allowing greater access for the developed countries industrial goods in their markets.