WTO Talks Make "Some Progress," But Mood Somber

A latest round of talks to salvage a global trade deal made "some progress" on Thursday, ministers said but officials said the mood behind closed doors was somber.

"Things are very fluid and there are a lot of things that have not been decided," Brazilian Foreign Minister Celso Amorim told reporters after talks between seven of the World Trade Organisation's most important members met into the early hours.

European Union trade chief Peter Mandelson said further talks were needed.

"I believe this is a moving picture and we've still got a lot of frames to travel through but I believe we can get to the end," Mandelson said as the talks broke up shortly before 3:30 am.

The ministers from Australia, Brazil, China, the European Union, India, Japan and the United States attempted to narrow differences on major stumbling blocks that have dogged the World Trade Organisation's Doha negotiations for a global trade deal.

One official close to the talks said the atmosphere was "somber" as rich and poor countries remained at odds over steps needed to break the deadlock.

WTO Director-General Pascal Lamy called ministers from about 30 key countries to Geneva this week for last-ditch talks on the WTO's Doha round to liberalize trade around the world.

But even that reduced number from among the WTO's 153 members turned out to be too cumbersome to make progress in the complicated talks which were launched nearly seven years ago but have been mired in crisis for much of the time since then.

Talks To Resume

Lamy on Wednesday narrowed the group down further to the seven key rich and poor WTO powers.

The seven discussed six issues on agriculture and three on industrial goods ranging from cotton subsidies to measures to prevent developing nations from shielding entire sectors from import tariff cuts, WTO spokesman Keith Rockwell said.

Talks were due to resume later on Thursday, ministers said.

Earlier on Wednesday, Indian Commerce Minister Kamal Nath gave a cautious welcome to an offer made the previous day by U.S. Trade Representative Susan Schwab to bring down the cap on America's trade-distorting farm subsidies to $15 billion a year.

But he was quickly criticized from Washington for not responding in kind. "The United States is showing substantial leadership to move these negotiations forward," said Chuck Grassley, a member of the U.S. Senate finance committee.

"Now we need to see a reciprocal demonstration of ambition on new market access commitments from our major trading partners, including advanced developing countries like India, Brazil, Argentina and China," he said in a statement.

The exchange encapsulated the dilemma at the heart of the Doha talks. Developing countries want rich nations to open up their markets for farm goods and reduce agricultural subsidies that discourage their own farmers from growing food.

Rich countries accept they must move on agriculture, but want more access to developing country markets for industrial goods like cars and chemicals, or services like banking.

Without a breakthrough on agriculture and industry before the August summer break, the Doha round risks being sidelined by November's U.S. elections and next year's changeover in the U.S. White House and at the European Commission.