WTO talks fail to make breakthrough, crisis looms

GENEVA, July 1: Major trade powers appeared to have failed today to make a breakthrough in World Trade Organisation (WTO) talks and India's top negotiator said the WTO's free trade round was in crisis.

''We must understand that we have not been able to move. We must recognise there are major gaps...there is a crisis,'' Nath told journalists after late night talks between leading WTO members.

Brazilian Foreign Minister Celso Amorim, who also attended the meeting along with top officials from the United States, the European Union, Australia and Japan also told reporters that no progress had been made.

But the Brazilian said that the leading WTO countries were willing to continue trying to find a deal, although he did not say how this would be done.

Nath said that there would be no more meetings this weekend of the so-called G6, which has been spearheading the search for a deal in the WTO's troubled Doha round of free trade negotiations.

EU trade chief Peter Mandelson declined to comment as he left the talks, but Australian Trade Minister Mark Vaile spoke of ''inch by inch'' progress.

On Friday, WTO chief Pascal Lamy had warned member states that talks on global trade were heading for a crisis because leading countries were reluctant to move.

''We are putting at risk the future of the Doha round ... If we do not turn things around radically in the next few hours or days, we will frankly be facing a crisis,'' he said. ''We are well into the red part of the red zone.'' Some 60 ministers, a third of the WTO, are in Geneva in a bid to thrash out a pact by tomorrow on farm and manufacturing trade, core areas of the WTO's Doha round.

Without a deal in these key areas this weekend, Lamy says the WTO will run out of time to conclude the round, which also includes complex issues such as services, by the end of the year, which is the absolute cut-off.

The talks pit the European Union and the United States against each other and against leading developing states.

Launched in 2001 to boost the global economy and tackle poverty, the round is far behind schedule due to deep divisions, particularly between developed and developing states.

But what had already been agreed, such as an end to farm export subsidies by rich states, was already more than had been achieved in any previous trade round, Lamy said.

The United States is resisting pressure to give ground on farm subsidies. Talk by the EU that it could be more flexible on tariffs seems unlikely to be 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 state demands on manufacturing were excessive.

Reuters