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Global trade negotiations in Geneva near collapse

Trade officials have warned that global trade talks are close to breaking point, leaving the EU with 10 days to either resolve a bitter internal rift or convince partners in the WTO to tame their demands on farm import barriers.

The 25-nation EU was at the heart of a battle over further cuts in tariffs on farm produce during a week of intense talks at the WTO ahead of the trade body's ministerial conference in Hong Kong.

Crawford Falconer, the New Zealand ambassador leading the agricultural negotiations, warned on Friday that he only had another 10 days to put together a draft agreement that would be ready in time for the conference on Dec. 12.

"The process is on life support right now," Falconer told reporters.

"It's probably another 10 days before the doctor decides to switch it off or not," he said.

After France convened an EU meeting earlier in the week to rein in European Trade Commissioner Peter Mandelson, the former British minister found himself in a tricky position when he later met four other WTO heavyweights -- Australia, Brazil, India and the US.

The group of "Five Interested Parties" represents a cross-section of interests at the WTO, and any compromise it beats out stands a better chance of being accepted by the full 148 strong membership of the trade body.

Decisions in the WTO are taken by consensus, so any package will need unanimous support.

Mandelson is under pressure in the five to improve on his offer of a 20 to 50 percent cut in duties on agricultural imports. He also faces internal pressure, especially from France, one of the EU's top farm producers and a prime beneficiary of the bloc's Common Agricultural Policy, not to go too far.

The spat has driven the WTO's Doha round to deadlock once more, despite a brief flurry of hope when major trading powers suddenly started putting improved offers on the negotiating table earlier this month.

After missing several deadlines in recent years, the talks on freeing up trade, which were launched in the Qatari capital in 2001, are meant to be largely completed in Hong Kong.

The last WTO ministerial conference in Cancun, Mexico in 2003 faced a similar target. It collapsed, triggering a deep north-south rift largely over agriculture that paralyzed the ground-breaking WTO talks for almost a year.

Senior US Trade Representative Rob Portman warned that specter of Cancun was looming once more while Australian Trade Minister Mark Vaile voiced disappointment.

"France and other EU members have taken the EU to the brink of collapsing the round," Vaile said on Thursday.

The US wants a deal on farm tariffs before other issues in the talks are dealt with. The EU believes it is the only top member to have made concessions since the beginning of the round four years ago. It is demanding progress in return on issues such as industrial goods.

Brussels is expected to make a new offer on farm tariffs during a telephone conference of the five WTO heavyweights in the coming week, according to US officials.

However, Mandelson has not confirmed the meeting.
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