WTO talks boosted by banana row progress

GENEVA (Reuters) - Talks to rescue a global trade deal got another boost on Sunday with progress towards settling a row over bananas and other long-standing disputes, but concerns grew about China's openness to imports.

"There is very substantial progress on bananas" said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson after a seventh day of painstaking negotiations at the World Trade Organisation (WTO).

The world's biggest economies are trying to break a deadlock in the WTO's Doha talks for a global trade deal which were launched in 2001 but now risk further years of delay without a breakthrough in the coming days.

A deal on bananas would remove a potential pitfall for the talks which could give a boost to the global economy.

A dispute over subsidies paid by the United States to its cotton farmers also featured in Sunday's negotiations with the European Union saying progress was needed in order to unlock progress on other key issues.

U.S. Trade Representative Susan Schwab said some developing countries were threatening to scupper the delicate package of compromises pieced together so far which has raised hopes that a long-elusive WTO breakthrough might finally be within reach.

"Unfortunately, a few emerging markets have decided they somehow want to rebalance it in favor of one or another issue," she said.

"You pull one thread it threatens to unbalance the only path to success that we've had up to this point, and I think that's a very disturbing prospect."

Schwab earlier met trade ministers from Benin, Burkina Faso, Chad and Mali to discuss their demand for an 82 percent cut in U.S. cotton subsidies, which they say encourage overproduction and steal away precious export markets.

Some developing nations said they feared that China wanted to protect markets for rice, cotton and sugar and industrial sectors, closing new export opportunities for them.

BANANAS NEARLY DONE?

In a move to end the bananas dispute, the EU and Latin American exporters agreed on Sunday to cut the EU's import duty to 114 euros ($179) a tonne by 2016 after an initial cut to 148 euros in 2009 from 176 euros now.

But Cameroon, speaking on behalf of banana exporters in the former European colonies in Africa, the Caribbean and Pacific (ACP) group, said the deal was unacceptable in its current form.

Lowering EU import tariffs further for the ACP's competitive Latin American rivals could devastate ACP banana output, some countries warn. Their bananas face no EU import duty under the bloc's preferential trade deals with former colonies.

Cameroon's trade minister Luc Magloire Atangana Mbarga said the dispute could block the wider talks. "There is a real risk but trade negotiations should not be about blackmail," he said before meeting EU officials. "We want healthy discussions."

He said African banana growers wanted cash to compensate for export revenues lost to Latin American competitors and a two- or three-year grace period before EU tariffs are lowered.

EU member states France and Spain also have farmers in the Caribbean territories and the Canary Islands who grow bananas.

Cameroon's banana industry is the biggest employer in the country after the public sector, and government officials say the industry helps prevent unrest in West Africa, which has been wracked by conflict in some countries in recent years.

The latest round of WTO talks began on July 21 and are likely to stretch into the middle of the coming week.

Ministers are seeking agreement on how to open farm and industrial markets, the two toughest areas of a global deal. A final deal would also included opening up services markets.

(additional reporting by Laura MacInnis, Doug Palmer and Robin Pomeroy)

(Writing by William Schomberg)