Big gaps threaten Doha trade deal, negotiators warn

Workers prepare to stack containers using cranes at Thar Dry Port in Sanand in the western Indian state of Gujarat March 1, 2011. I

GENEVA (Reuters) - Sizeable gaps remain in talks on a world trade deal and nations must redouble their efforts to have any hope of meeting their deadline of this year to complete the long-running Doha round, trade diplomats said on Tuesday.

At a meeting of the World Trade Organization to review the decade-old Doha talks, many countries said the negotiations were making progress on technical details but what was needed was a deal to create real market access for exporters.

"We don't have a problem of process, we have a problem of substance," Brazil's ambassador to the WTO, Roberto Azevedo, told reporters after the meeting. "The fact is that we have a very big gap in the negotiations."

U.S. ambassador Michael Punke told the meeting he had seen encouraging signs in the way states were getting involved in the talks, but sizeable substantive gaps still needed to be bridged.

With time running out WTO members needed to be creative and push for a reasonable deal, even if it is not perfect for all, he said: "The end-game is now, one way or the other."

Speaking to reporters after the meeting, Punke said the key to a deal was for the big emerging economies such as Brazil, China and India to shoulder the responsibility commensurate with their size and growth and open their markets accordingly.

For instance the United States wants the emerging economies to sign up to voluntary deals in which participants eliminate or sharply reduce tariffs in certain industrial sectors in addition to any general cut that is agreed in import duties.

But Azevedo said such demands effectively meant Brazil was being asked to make deeper cuts in tariffs than had already been largely agreed in principle. The general tariff cuts, not the sector deals, should be the focus of the negotiation, he said.

"If this view prevails then we're not entering the end-game, we're reaching the end of the game," he said.

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Brazil has so far been one of the main supporters of a deal but Brazilian officials say they find it difficult to accept calls from Washington for more market access after Brazil's trade balance with the United States swung into a deficit of $10.2 billion last year from a surplus of $6.9 billion in 2006, exacerbated by the strong real and weak dollar.

Leaders of the G20 have urged the WTO's 153 members to conclude the Doha talks, launched in late 2001 to boost the world economy and help poor countries prosper through trade, and said 2011 offered a window of opportunity.

The outlines of a deal are clear. Rich countries will open protected farm markets and cut trade-distorting farm subsidies while emerging economies open up markets for industrial goods and both free up services. Poor countries will do nothing.

But many trade officials and diplomats say the talks will collapse or peter out if no deal is reached this year.

WTO Director-General Pascal Lamy told the meeting that the talks were making progress in all areas and at all levels.

"However, we should not fool ourselves. Members are very timidly engaging into 'give and takes'. Our current process -- at each and every level -- remains too slow," he said.

And so far the talks had failed to produce the sort of breakthrough that the diplomats chairing the different areas such as agriculture and industrial goods needed to produce revised negotiating texts.

WTO members have agreed to produce texts in the nine main areas by late April, narrowing existing gaps further or setting out common positions for the first time.

Such texts are a precondition for reaching an outline deal by July allowing detailed work on an agreement to be completed by the end of the year.

Some members say the talks should not be held hostage to yet another self-imposed deadline.

South Africa would rather have a successful deal that promotes development rather than an early agreement, Trade and Industry Minister Rob Davies said in Cape Town.

But at Tuesday's WTO meeting many speakers said the window of opportunity was closing fast. Hong Kong's ambassador said it was now no wider than an arrow slit in the Castle of Chillon at the other end of Lake Geneva.

(Editing by Louise Ireland and Stephanie Nebehay)