U.S. returns to Doha talks with renewed optimism

By Missy Ryan

WASHINGTON (Reuters) - The Bush administration returns to world trade talks next week with renewed optimism, but even the most ardent supporters of the Doha round see formidable hurdles to clinching a deal.

Negotiators will gather in Geneva to press ahead in the World Trade Organization's Doha round.

In interviews on Friday, Agriculture Secretary Mike Johanns and a senior U.S. trade official painted a picture of renewed optimism, mixed with caution after six years of deep divisions on farm subsidies, tariffs and a host of other issues.

"I believe it's still doable ... my hope is that other countries will share that optimism," Johanns said.

The trade official, speaking on condition of anonymity, said the climate had improved since an unhappy end to talks in Potsdam, Germany in June between the round's major players.

"I'm fully expecting to go back to Geneva and find countries ... coming there with the intention of negotiation and not just reiterating the same sort of speeches," the official told Reuters on condition of anonymity.

"We certainly are ready ... and I think we'll see it," he said.

But it remained unclear if intentions will push countries past sticking points. Washington, for example, wants to ensure lower tariffs abroad compensate for farm subsidy cuts at home.

Patience is wearing thin for a round which has missed deadline after deadline. President George W. Bush and U.S. Trade Representative Susan Schwab are expected to discuss Doha prospects next week at a summit in Australia, but Bush so far has not veered from his demands for greater market access.

Just this week, French Economy Minister Christine Laguard said wide gaps would preclude an agreement in the near future. France is a major voice on agriculture in the European Union.

DEVIL IN THE DETAILS?

The U.S. trade official believes the talks got a boost in July when Crawford Falconer, who chairs the round's agriculture negotiations, released a draft proposal that helped negotiators discern what a new trade deal would mean for their countries.

But the official pointed to several U.S. priorities the paper had skirted, like tropical products and goods developing countries can shelter from full tariff cuts. He said more precise definitions and smaller ranges for tariff or subsidy cuts are needed.

U.S. farmers promise to fight any agreement without a net increase in trade, and the official said it has been difficult to sell a deal to industries at home "when you have no idea what the parameters are."

The official said the United States would reach out to countries like Brazil and Argentina, which along with India have emerged as developing country foils to U.S. and European clout in the round.