G20 leaders call for Doha breakthrough by year end

By Doug Palmer

WASHINGTON (Reuters) - World leaders agreed on Saturday to "strive" for a major breakthrough in long-running world trade talks by the end of the year and pledged not to raise any new trade barriers for the next 12 months.

"There is a determined effort to see if we can't complete the modalities for Doha by the end of December," U.S. President George W. Bush said, referring to the politically sensitive core details of how countries would cut farm subsidies and tariffs on both agricultural and manufactured goods.

Both developed and developing country leaders attending the Group of 20 summit stressed the role the seven-year-old trade round could have in restoring economic growth battered by the worst financial crisis since the 1930s.

"A successful conclusion to the ongoing multilateral trade talks would be an important confidence builder at this stage," Indian Prime Minister Manmohan Singh said, a point Brazilian President Luiz Inacio Lula da Silva also made.

The G20 meeting brought together key players in the Doha round, including the United States, the European Union, Brazil, China, India, Japan, Australia, Canada, Britain and France.

The world trade talks have lurched from one crisis to the next since countries agreed in the capital city of Qatar on November 14, 2001 to launch the negotiations.

With Bush set to leave office on January 20, many countries would like to wrap up the basics of a Doha agreement before his successor, President-elect Barack Obama, takes over.

"If there is the political will, it would be good if we could reach an agreement in the Doha round with the present U.S. administration," German Chancellor Angela Merkel said.

World Trade Organization Director General Pascal Lamy, in a statement from Geneva, said the G20 leaders provided the Doha round with a "much-needed political impetus."

'SUPPORT ... INTO ACTION'

"What we need now is for this strong show of support to be translated into action at negotiating table," Lamy said.

Lamy has indicated he would call trade ministers back to Geneva only if there is a good chance of reaching a deal.

A breakthrough would require the chairmen of various negotiating groups based in Geneva to quickly produce new texts that capture the progress made in July and come up with possible solutions for the tough remaining issues.

The G20 leaders had a "passionate" conversation over lunch on Saturday about the importance of finishing the Doha round, a Bush administration official said.

"That's going to be tough to do but certainly that's something that we believe is important," Canadian Prime Minister Stephen Harper said.