"Serious substantive gaps" remain in WTO talks - USTR

WASHINGTON, Jan 18 (Reuters) Countries are still far apart on many key issues in world trade talks, but seem to share an urgent desire to reach a deal before that chance slips away, a top US negotiator said on Wednesday.

''There's still some serious substantive gaps, but I think what has changed most significantly is ... a renewed sense of urgency that time is short and if we want ... a successful conclusion of this round then people will need to be flexible,'' Deputy US Trade Representative John Veroneau told reporters.

The world trade talks were suspended almost exactly six months ago after a group of six key trading partners -- the United States, the EU, Brazil, India, Japan and Australia --failed once again to agree on formulas for cutting farm subsidies and tariffs, the central issue in the talks.

Since then, the United States and other WTO members have been quietly ''exploring ways to get to a position where we could have a breakthrough that ... would allow us to have confidence that an agreement could be reached in the following number of months,'' Veroneau said.

That activity has increased in recent weeks as countries face the prospect the new Democratic-controlled Congress may not renew White House trade promotion authority that expires on July 1. Many experts believe the trade round will be dead for years without an extension.

About 30 top trade officials, including US Trade Representative Susan Schwab, will meet next week in Davos, Switzerland, during the annual World Economic Forum. That meeting hopefully will help set the stage for the much-needed breakthrough in the months ahead, Veroneau said.

The United States and its trading partners have been discussing what each side needs to do in the five-year-old Doha round of world trade talks to reach a deal, even though no new proposals have been made public, Veroneau said.

''Obviously, the discussions in this quiet conversation phase have been substantive, but all parties have refrained from discussing that substance publicly at this point,'' Veroneau said.

The United States is under pressure to make deeper cuts in its domestic farm subsidies, but has insisted it can only do that if other countries offer more substantial market openings in agriculture as well as manufacturing and services.

A breakthrough in the talks would help the Bush administration win renewal of trade promotion authority, which allows the White House to negotiate trade agreements that Congress must approve or reject without making changes.

''If we have traction on Doha, clearly that would help any campaign for TPA (trade promotion authority),'' Veroneau said.

But he declined to say whether President George W Bush would push for an extension of the trade negotiating authority if the Doha talks remained stalled.

''I'm not going to get out in front of the White House on when the president calls for a piece of major legislation like that,'' Veroneau said.

REUTERS PKS BST0525