WTO chief optimistic on Doha trade deal

The World Trade Organization (WTO) chief Pascal Lamy speaks during a news conference in Mexico City in this March 23, 2007 file photo. Lamy said on Thursday he believed the framework of a global trade deal was achievable before the end of the year, with agreement possible even on the thorniest issues.

LIMA (Reuters) - World Trade Organization chief Pascal Lamy said on Thursday he believed the framework of a global trade deal was achievable before the end of the year, with agreement possible even on the thorniest issues.

Many analysts think the next few weeks are critical for the fate of the Doha round of trade talks, which began in late 2001. Without a breakthrough soon, the talks could be shelved until 2009, or possibly longer.

"My own diagnosis is that it's doable, that reaching the essential elements, the essential skeleton, before the end of this year is doable," the WTO director-general told Reuters in an interview in the Peruvian capital, Lima.

Negotiators in Geneva are trying to work through the most divisive issues -- linked to industry and agricultural goods -- preventing a broader accord in the much-stalled Doha round, named after the capital of Qatar where they were launched.

Those include the size of cuts in U.S. farm subsidies, how far the European Union and Japan will reduce tariffs that limit access to their markets for farm goods, and by how much developing countries will lower duties on industrial imports.

Lamy, in the South American country for a regional trade forum, said he believed it was "perfectly possible" for an agreement on the main issues.

"Not the whole of the detail on the 20 chapters of the negotiations but the essential elements in areas like agriculture subsidies, agriculture barriers, industrial barriers, services, anti-dumping," he said.

POLITICAL WILL

On the weekend, the 21 members of the Asia Pacific Economic Cooperation forum said they saw "real progress" in the talks in Geneva and pledged flexibility and the political will to forge a deal by the end of 2007.

"(APEC) gave a sort of push to the negotiations," Lamy said.

Lamy halted the Doha trade liberalization round last year after trade powers were unable to break the impasse over the farm and manufacturing protections.

The talks were dealt another blow in June when the EU, United States, Brazil and India failed to overcome their differences over the politically sensitive issues.

Lamy, a former EU trade chief, warned of the consequences for developing nations if the Doha round were to fail.

"This would be very bad news for developing countries," said Lamy, who has urged the WTO's 150 member states to wrap up talks this year so they do not coincide with the U.S. presidential election in 2008, when Washington is seen having less flexibility to negotiate.