GENEVA: A torrent of anger and disappointment from governments, business lobbies and farmers followed recent new proposals from the World Trade Organization for a deal that would end long-running trade talks.

But seasoned diplomats cautioned that the rhetoric should be taken with a pinch of salt. They said the revised texts had helped put WTO's Doha round of negotiations within sight of an agreement.

"The more pleased you are, the less pleased you must sound," said one diplomat from a major developed country.

That is not to say that Doha, now in its seventh year, does not face massive hurdles before a deal to open up global trade can be brought home.

The chances of a successful deal this year are 60 percent, the WTO's director general, Pascal Lamy, told the European Parliament on Thursday.

But nine months of intensive negotiations on agriculture - the critical element to a deal - have whittled away many of the differences in farm trade.

In industrial goods, Canada's ambassador to the WTO, Don Stephenson, who is chairman of the talks, has bemoaned a lack of serious negotiation. But diplomats say WTO members are at last starting to make genuine efforts.

Revised negotiating texts last week in agriculture and industry, and reports this week of new talks on services and trade rules, are intended to serve as a blueprint for a meeting of ministers that could occur in the next few weeks.

That meeting will tackle the tough political decisions on cuts in farm and industry subsidies and tariffs that would open the way for a comprehensive trade deal, which the 152 members of the WTO say they want by the end of this year.

Backers of a deal say it would increase confidence in the world economy and help developing countries increase exports and raise living standards.

But before ministers can meet, negotiators need to tidy away a whole range of complicated technical issues.

"It's more optimistic than it was," said a senior diplomat from a major developing country. "People think you could bring these papers to ministers, which wasn't the case before."

The talks are still hung up on differences between rich and poor countries. The main question is how much a deal should open up markets to new trade, while protecting farmers and fledgling industries in developing countries from the full force of competition.

The United States and the European Union say a deal will only make sense if big developing countries like Brazil, India and South Africa open up their markets for manufactured goods to businesses from wealthy nations as well as other developing nations.

But developing countries say a Doha agreement - named after the city in Qatar where the negotiations began - must be balanced between agriculture and industry.

If rich countries want to protect their farmers by seeking waivers to proposed cuts in agricultural tariffs, then poor countries will scale back the size of industrial opening.

In the latest clash Wednesday, Washington and Brussels sounded alarms over new industry proposals that they fear would allow developing countries to protect a large number of sectors from tariff cuts.

Talks on liberalizing markets for services like banking, telecommunications and health also appear deadlocked, with no new offers presented since late 2005.

In agriculture, many expressed reservations about the proposals by the WTO ambassador for New Zealand, Crawford Falconer, who is chairman of the farm talks. But the G-20, one of the main coalitions of developing countries, led by Brazil and India, was upbeat.

"We now have a clearer picture of possible landing zones," the group said in a statement. "The G-20 regards your text as a good basis to build on."

Even issues which appear completely intractable are amenable to a solution, trade experts say.

For instance the United States insists that a new agreement on unfairly priced imports should recognize Washington's controversial "zeroing" method for calculating anti-dumping duties. Every other WTO member wants it formally banned.

"There's a price for everything," said one senior trade official. Many countries, for example, are keen to impose limits on the duration of anti-dumping measures, but Washington wants them to be renewable, subject to review.

A good example of the nuances of negotiating stances came from the European Union on Tuesday in its reaction to the new industrial goods proposals.

"The risk we see in the current text is that of absolutely no new market access," the director general of the EU trade office, David O'Sullivan, told WTO members, according to a participant in the meeting.

Meanwhile, the EU trade chief, Peter Mandelson, addressing the European Parliament, had a slightly different message, as he spoke with an eye to European businesses and trade unions.

"Within the ranges provided by the text, the EU can secure some new market access in key markets in China, Asia and Latin America," Mandelson said.

By Jonathan Lynn Reuters

Published: May 29, 2008

Source: www.iht.com