Hopes of reaching world trade deal revive at WTO

GENEVA (Reuters) - Ministers hailed an emerging trade deal on Friday, as compromise proposals revitalized deadlocked talks at the World Trade Organisation (WTO).

But they warned that much work was still needed to get full agreement on the delicately crafted proposal.

"What's on the table is not perfect, it's not beautiful but it's finally put together what will be a genuine boost for the world economy and particularly good for developing countries," European Union trade chief Peter Mandelson said.

"There is an emerging deal but not a done deal," Mandelson said after a make-or-break meeting of ministers.

Indian Commerce Minister Kamal Nath, whose tough stance earlier in the week was blamed by many colleagues for the deadlock, sounded more cautious, saying: "There are certain areas of concern, there are certain areas of consensus."

U.S. Trade Representative Susan Schwab said ministers had reached tentative agreement on the way forward, but added:

"I think the biggest concern that we have is that a handful of large emerging markets really threaten this round for the rest of us."

COMPROMISE PAPER

The compromise emerged from a five-hour meeting of seven key WTO players looking for common ground in efforts to prise open markets for agricultural and industrial goods.

It was then reviewed by ministers from some 35 countries called to Geneva by WTO Director-General Pascal Lamy this week to seek a breakthrough in the WTO's Doha round, now in its seventh year.

The paper includes a further cut in the cap on contentious U.S. farm subsidies to $14.5 billion.

It also changes proposals allowing developing countries to shield their farm sectors and some industrial goods from the full force of tariff cuts, which have been at the centre of this week's deadlocked discussions.

"Everyone has some concerns. Every single member has some concerns," said WTO spokesman Keith Rockwell. But "no delegation said this paper should be rejected".

The new proposals breathed life into the make-or-break talks at the World Trade Organisation (WTO) which earlier on Friday were at risk of collapse, with rich and poor countries and importers and exporters at loggerheads.

The proposals on industry would allow developing countries to keep a high level of protection and carve out some sectors from market opening, an official at the EU employers group Business Europe said.

The changes in agriculture sought to find a middle way between the concerns of food exporters, rich and poor, like Australia or Brazil, and food importers.

But even if the emerging deal in the core areas of agriculture and industry holds, full agreement is still not guaranteed, because of a series of other disputes, such as a row among developing countries and the EU about bananas.

In a further sign of optimism, the WTO called its delayed "sigalling conference" on services for Saturday afternoon.

That session will give negotiators interested in improved access to other countries' services sectors, such as banking and telecoms, an idea of the prospects for liberalization.

That is intended to give them "comfort" as they negotiate on the core areas of agriculture and industrial goods, even if they get no firm commitments on services, which account for 50-80 percent of WTO economies but a relatively small share of trade.

(Additional reporting by Doug Palmer; editing by Andrew Roche)