India hopes for progress on WTO trade deal this week

DAVOS, Switzerland (Reuters) - India is hopeful trade ministers can make progress this week towards a long-delayed global trade deal but U.S. elections and European "protectionism" could be problems, India's trade minister said.

"I am optimistic this Davos will create a greater momentum towards the conclusion" of the World Trade Organisation's Doha round of negotiations for a global free trade deal, Commerce and Industry Ministry Kamal Nath told reporters on Tuesday.

"But I am also realistic. I am realistic that there is an election in the U.S. I am realistic that Europe is (in) a new phase of protectionism," Nath said.

He was speaking after arriving in the Swiss Alpine resort town of Davos for the annual meeting of the World Economic Forum which is due to begin on Wednesday.

Trade ministers from several countries will hold bilateral meetings in the coming days in Davos before gathering for a lunch on Saturday with WTO chief Pascal Lamy to discuss the chances of a breakthrough in the Doha round.

The negotiations were launched in 2001 to boost the world economy and help poor countries fight poverty by exporting more.

But differences remain deep over how to cut barriers to trade, especially in farm and industrial goods.

Without a deal soon, the round could be put on hold for two more years or longer as the United States prepares for elections and a new administration settles in, trade officials warn.

French President Nicolas Sarkozy has said he will oppose a new deal that goes against French interests.

India is one of the leaders of developing countries involved in the WTO's negotiations.

The trade chiefs of the European Union and the United States said on Monday they hoped the Doha round could be closed in 2008 with EU Trade Commissioner Peter Mandelson saying a breakthrough was needed by the "very early spring."

(Reporting by Natsuko Waki; Writing by William Schomberg; Editing by Jonathan Lynn)