Trade talks face new test as pressure grows

DAVOS, Switzerland, Jan 27 (Reuters) Ministers from around the world meet today to see whether they can revive struggling global trade talks, under growing pressure from political and business leaders to break the impasse.

The talks risk running out of time and about 30 trade ministers will gauge the chances of resuming negotiations soon.

They were suspended last year due to big differences, chiefly over politically sensitive farm trade.

''We have never been so close to doing a deal like this,'' Brazilian President Luiz Inacio Lula da Silva said at the World Economic Forum gathering of political and business leaders.

He urged other countries, especially the United States and Europe, not to lose the chance of a deal that could help ease poverty in many countries, as well as injecting hundreds of billions of dollars to the global economy.

British Prime Minister Tony Blair, also in Davos, said he was hopeful the talks could be resumed after he spoke recently with U S President George W. Bush and German Chancellor Angela Merkel whose country holds the EU and G8 presidencies.

''I think everybody is prepared to make concessions now,'' Blair later told CNN, noting what he said was an improvement in the atmosphere surrounding the talks.

Business groups around the world have recently called on their governments to strike a deal.

The World Trade Organisation's Doha round of negotiations was launched after the 2001 attacks on the United States.

A deal would cut tariffs on goods ranging from beef cuts to luxury cars and give more opportunities to service providers such as banks and port operators.

But the round was halted last July due to sharp differences over how much the United States should cut farm subsidies and how much the European Union should reduce farm import tariffs.

The EU and the United States both want big developing countries like Brazil and India to open up their economies to industrial goods and services.

''We are very concerned,'' South African Trade Minister Mandisi Mpahlwa told Reuters. ''We never had a round with so much on the table and the likelihood of losing it all is quite big.'' As well as helping trade and investment, the Doha round would channel billions of dollars in trade-related aid for poor countries to build infrastructure to export more.

The round risks being delayed by several years or collapsing due to the expiry at the end of June of Bush's fast-track powers to approve trade deals.

Negotiators hope that if they can come up with the outline of a deal soon, the Democrat-controlled U S Congress might put party politics aside and grant an extension of those powers.

But it is unclear whether the differences can be narrowed sufficiently to resume talks on what a deal should look like.

EU and U S officials have been thrashing out scenarios for how Washington could cut subsidies and how much Brussels might open its markets in sensitive farm goods such as beef and dairy.

Just as Bush faces a strong domestic agriculture lobby, EU Trade Commissioner Peter Mandelson has been repeatedly warned by France not to offer more farm concessions to get a deal.

REUTERS PDS RN0743