Trade talks collapse, throw WTO round into doubt

POTSDAM, Germany, June 21 (Reuters) Talks between trade powers to salvage world trade talks collapsed on Thursday, throwing the future of the World Trade Organisation's round into doubt.

Without an agreement soon between the United States, the European Union, India and Brazil, the WTO's Doha round could fail or go into the deep freeze for years, diplomats and trade officials have warned.

''The G-4 talks have collapsed. Obviously there was no convergence,'' a spokeswoman for the Indian Foreign Ministry told Reuters in New Delhi.

There was no immediate word on the reason for the breakdown.

But the four trade powers had been long deadlocked over tariffs and subsidies in agriculture and industrial goods.

The ministers were meeting in Potsdam, near Berlin, at the Schloss Cecilienhof palace, built during World War One by Kaiser Wilhelm II and where allied leaders plotted Europe's future after World War Two.

The fate of the round has been seen as depending on whether the so-called G4 group can resolve differences this week on agriculture that have haunted the talks since they were launched more than five years ago 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.

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

U.S. Trade Representative Susan Schwab told Reuters last week the G4 could make dramatic progress towards a deal the entire 150-country WTO could support but that would require progress on more than just agriculture.

Brazil's Foreign Minister Celso Amorim was quoted in the Brazilian press as saying the United States still was not offering to cut its domestic farm subsidies as far as developing countries wanted, but the cuts being discussed ''are starting to look more favourable.'' In a letter to Schwab and EU Trade Commissioner Peter Mandelson on Wednesday, leading U.S. and European manufacturers warned they could not support an agreement that did little to open developing countries to additional exports.

REUTERS PV BD1942