U.S. manufacturers press for stronger WTO package

GENEVA (Reuters) - U.S. manufacturers will not back a proposed compromise in world trade talks unless leading developing countries like Brazil, India and China agree to sharply cut tariffs in key industrial sectors, a top industry official said on Saturday.

"If they don't commit to sectorals, I see no way we can get behind this," Frank Vargo, vice president of the National Association of Manufacturers, told Reuters one day after a compromise shaped by World Trade Organization Pascal Lamy broke a deadlock in the long-running Doha round.

Trade ministers are meeting in Geneva to try to finally agree, after seven years of talks, on terms for cutting farm subsidies and tariffs on agricultural and manufacturing goods.

U.S. manufacturers are expected to play a decisive role in congressional consideration of any Doha round package.

Automakers and textile companies have already warned they could oppose the deal, making it vital for the White House to have support from the broader manufacturing sector.

The compromise plan for cutting overall tariffs in developing countries is "so weak" U.S. manufacturers can only support the package if top emerging markets join in negotiations to slash tariffs to zero in specific sectors such as electronics and industrial machinery, Vargo said.

The proposal encourages countries to participate in at least two sectoral talks by allowing them to take smaller cuts in their other industrial tariffs.

But unless big developing countries like China, Brazil and India agree to participate, the sectoral initiative is meaningless, Vargo said. Effective sectorals should cover around 90 percent of world trade, he said.

U.S. Trade Representative Susan Schwab hailed the compromise agriculture and manufacturing trade reform plan on Friday as an important step forward, but said "a handful of large emerging markets" threatened to wreck the talks because they were refusing to open their markets.