Negotiators losing hope of Doha trade deal in 2007

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GENEVA, Oct 26 (Reuters) With few concrete results to show after two months of intense negotiations on the Doha round to liberalise trade, a basic deal looks increasingly unlikely by the end of the year, diplomats said today.

Despite a frenetic series of meetings, consultations and talks in large and small groups since the start of September, negotiators at the World Trade Organisation's (WTO) Geneva headquarters have not made any dramatic progress.

The United States says the richer developing countries are not showing enough willingness to open their markets for industrial goods with cuts in tariffs.

That, and greater access to markets for services like telecoms and banking, is the price Washington is seeking for politically sensitive cuts in its farm support.

It also says some rich countries like Japan and Switzerland are still shutting out food imports to protect their farmers.

And big developing nations like Brazil, India and South Africa say Washington wants them to expose their industries to competition before conceding the cuts they want in US farm subsidies that squeeze their goods out of world markets.

Many negotiators were talking recently of outlining a basic agreement by December. But the recent demands, criticisms, and counter-proposals now make that look unrealistic.

''If we want a deal then we allow the process to continue and see where it takes us. If it's not December, it's February, or March, or whenever,'' a major developing country ambassador said in a comment to Reuters.

The Doha round was launched six years ago to remove barriers to trade to boost the world economy and in particular to help developing countries export their way out of poverty.

MORE CLARITY The last eight weeks of talks in Geneva have yielded some progress on technical issues such as export finance for farm products, but the main advance has been greater clarity on where countries stand on the issues, diplomats say.

WTO Director-General Pascal Lamy says a good deal is now doable, but little time is left.

''This is not just another checkpoint in negotiations. It is probably our last chance to move this round to a successful conclusion,'' he said in Washington on Saturday.

Political leaders have also voiced support for a deal.

But this is not translating into instructions to the negotiators on the ground to get the deal done, diplomats say.

Some players at the WTO say the expression of differences, counter-proposals and brinkmanship are a positive sign that the negotiations are reaching their climax.

''It's the end game,'' one seasoned negotiator, who is the WTO ambassador for a medium-sized developing country, told Reuters.

''All the negotiators are fighting to the death.'' DESPERATE TO DEAL? Nobody wants Doha to fail, but one factor weighing against a quick outcome is no one is desperate for a deal, diplomats say.

Even Brazil, which could become an agricultural superpower if rich countries open up their farm markets, is mixed.

Its manufacturers are already hit by the doubling of the real against the dollar in the last five years.

Now they fear competition from increased access to the Brazilian market for rich country companies that could be the price of cutting developed country farm support and tariffs.

And many countries, rich and poor, believe that the administration of President George W Bush, as it enters its last year, cannot deliver a deal for the world's biggest economy or get one through the US Congress.

US business and service industry lobbyists, eyeing the potential of developing country markets, lack the power to rein in US farm interests, poor nation diplomats say.

Among other rich powers, the European Union subsidises farming much more than the United States does. But at least EU members have agreed to cut farm support. With a new farm bill in Congress, the outlook for US agriculture subsidies is unclear.

The next step is for the chairmen of the key agriculture and industry talks in Geneva to issue revised negotiating texts in November intended to form the basis for an outline agreement.

''Whether the revised documents have the ability to say much that is new or close the gap remains the question,'' said the major developing country diplomat. ''There will be a lot of fire and brimstone but we will have to look beyond December.'' REUTERS GT RAI2243

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