Trade powers launch new WTO push, US hopeful

BERLIN, June 20 (Reuters) Trade powers launched an eleventh-hour effort to rescue global trade talks as negotiators prepared for what the United States called a critical week.

US Trade Representative Susan Schwab, leaving the first of five days of closed-door talks in Germany with counterparts from the European Union, Brazil and India, told reporters that this was ''a critical week'' for the talks, and that the US was prepared to do its part to make progress.

She warned, though, that after nearly six years of talks, fatigue was setting in and it was vital to move forward soon.

''We have a great political climate right now in terms of support from world leaders,'' and we don't want to see this opportunity slip away, said Sean Spicer, Schwab's spokesman, yesterday.

The fate of the Doha round could depend on whether the so-called G4 group can resolve differences this week on agriculture that have haunted the talks since they were launched more in 2001 in the capital of Qatar.

WTO boss Pascal Lamy has warned that without a breakthrough very soon, the round could be put on hold for several years.

Negotiators are also set to discuss two other pillars of the talks -- services and non-agricultural market access (NAMA), or manufactured goods -- which have received less attention due to developing countries' insistence that a deal to slash rich country farm subsidies and tariffs come first.

''We are looking forward to drilling down on NAMA and services,'' Spicer said.

John Engler, who heads the National Association of Manufacturers, urged President Bush in a letter this week against settling for slim gains in lowering barriers to manufacturing and services trade simply to get a deal.

''Failure to achieve a robust outcome would be not only extremely disappointing but likely disastrous for global trade and the US economy,'' he said.

The ministers are meeting in Potsdam, near Berlin, at the Schloss Cecilienhof palace, where allied leaders plotted Europe's future after World War Two. Representatives of Japan and Australia are due to join the group on Saturday.

Washington has demanded that any deal that significantly cuts US farm subsidies must open new export markets around the world in agriculture, manufacturing and services.

''NOT AT ANY COST'' Development groups fear the pressure to reach a deal after more than five years of talks could lead to a bad result.

''Poor countries badly need fairer trade rules and an end to trade-distorting subsidies if they are to reduce poverty,'' said Marita Hutjes, acting head of Oxfam's Make Trade Fair campaign.

''What they don't need is a deal done at any cost, that exposes them to further dumping, and undermines future development prospects.'' Schwab told Reuters last week the G4 could make dramatic progress toward a deal the entire 150-country WTO could support but that would require progress on more than just agriculture.

A private sector US farm policy analyst said preparatory talks among G4 trade officials boosted the chances of success this week.

''It's definitely not a sure bet, but I think they have a pretty good set-up for the meeting,'' the analyst said.

''But, they also have to sell any package ... to the broader membership and figure out a way of doing that without ticking people off. An agreement would be a big step forward, but it certainly wouldn't be anywhere close to a final deal.'' Campaign group Action Aid said a majority of negotiators from poor countries believe the WTO round, called the Doha Development Agenda, had failed in its aim of fighting poverty.

REUTERS KN SBA BST0702