U.S. trade chief says WTO trade talks at impasse

GENEVA, July 1 (Reuters) United States Trade Representative Susan Schwab said on Saturday that the WTO's Doha round was at an impasse, although not yet dead, after two days of ministerial talks failed to produce a breakthrough.

Despite warnings by World Trade Organisation chief Pascal Lamy that the future of the WTO negotiations hung by a thread, top trading powers did not bridge their divisions over farm and industrial goods, which lie at the core of the free trade round.

''We have clearly reached something of an impasse here. But does that mean the round is dead? No. We have no intention of giving up hope,'' Schwab told a news conference.

The United States is resisting pressure to give ground on farm subsidies. Talk by the European Union that it could be more flexible on farm import tariffs was not enough for a deal.

Developing countries said concessions by the rich WTO states on farm trade are a condition for them to cut industrial tariffs, the other half of a hoped-for bargain in Geneva. But rich states' demands on manufacturing were excessive.

''The U.S. is not in a position to settle for some mediocre version of a trade round that doesn't deliver real market access and new trade flows,'' Schwab said.

The WTO must complete the round -- which also includes a host of other issues -- by the end of the year because special U.S. presidential powers to negotiate on trade will expire next year and Congress looks unlikely to renew them.

REUTERS DKS DS1521