Trade ministers try again to salvage WTO deal

GENEVA, July 23 (Reuters) With a final deadline almost upon them, six trading powers met on Sunday in what could be a last attempt to overcome differences blocking the way to a global free trade deal.

The so-called G6 -- Australia, Brazil, India, Japan, the European Union and the United States -- must reach agreement on how to boost trade in farm and industrial goods or risk seeing nearly five years of WTO negotiations collapse in failure.

World Trade Organisation (WTO) chief Pascal Lamy, who has been given the task of brokering a deal, will chair two days of talks behind the high walls and barbed-wire fences of the U.S. mission in Geneva.

But as talks got under way, there was no immediate sign that either the United States or the EU, whose highly subsidised or protected farm policies are the heart of the deadlock, had come ready to make the concessions each is demanding of the other.

''People are being very cagey. They are exploring positions, circling round each other,'' said a G6 ambassador before the talks.

Diplomats say another failure by the six, who have already made several ''last ditch'' bids for a deal, would leave the 149-state WTO without enough time to complete all the complex details of a global free trade treaty by the end of the year.

The end-year deadline for concluding the Doha round, which was launched in the Qatari capital amidst much fanfare in late 2001, is dictated by the mid-2007 expiry of special U.S. presidential powers to negotiate on trade.

The round has been billed as a once-in-a-generation chance to boost global growth and lift millions out of poverty.

WTO head Lamy has set a further two days of talks for July 28 and 29, but diplomats said that without some progress this weekend there could be little point in a further session.

''It is difficult to imagine that we can continue coming here without anything happening,'' EU Agriculture Commissioner Mariann Fischer Boel told Reuters as she headed for the talks.

DEEPER CUTS After promising their negotiators would be more flexible, the Group of Eight leading industrial powers last week set a fresh mid-August target for a breakthrough in the key area of agriculture and manufactured goods.

The G6 has played a leading role because together they account for some three quarters of world trade and represent a wide range of commercial interests.

The United States must offer deeper cuts in its farm subsidies, the European Union must further drop barriers to farm goods' imports and the big developing countries must agree to open up their markets for industrial goods.

Washington says its current offer to reduce subsidy limits by 60 percent is significant but trade rivals argue the cuts leave real spending unaffected.

Although Brussels must also do more, neutral diplomats say at least the EU has shown it is ready to move closer to the level of tariff cuts demanded by the Brazil- and India-led G20 group of developing countries.

The big developing states are far from accepting the sort of cuts in manufacturing tariffs demanded by the rich nations and say the farm question must be addressed first.

REUTERS DKS RS1803