Talks fail to break deadlock over trade deal

Prospects of a new trade deal to end rich countries' farm subsidies and open up poor nations' markets were left hanging in the balance yesterday after a meeting of the world's top economic powers ended without a breakthrough.

Negotiators from the European Union, United States, Australia, Brazil, India and Japan held two days of talks in London over the weekend. The WTO's 149 member states are battling to meet a deadline of the end of April to agree draft accords in agriculture and industrial goods, two of the most contentious areas within the overall trade negotiations that were launched more than four years ago.

If they fail to achieve that it is almost certain they will be unable to finalise an agreement before President George Bush loses "fast-track" powers to approve trade deals in mid-2007 without going back to an increasingly protectionist Congress.

Celso Amorim, the Brazilian Foreign Minister, said after the talks ended on Saturday: "The 'click' is not yet there to have a deal."

Peter Mandelson, the EU trade commissioner, struck a more upbeat note, saying the six had made some progress. "We have had a good meeting so far, testing both the possibilities and limitations of these negotiations," he said.

Campaign groups condemned the rich countries for failing to break the deadlock by offering to make further cuts to trade-distorting agriculture subsidies and tariffs. "It's not up to poor countries to move first," said Liz Stuart, a spokeswoman for Oxfam.

Brazil and the UK issued a joint call for a meeting of heads of state to push through a deal after Tony Blair met Brazilian President Luiz Inacio Lula da Silva in London.

"A meeting of leaders will be crucial to orchestrate this breakthrough," they said in a joint statement. "Current offers fall well short of the deal we want."

ActionAid, the anti-poverty charity, said talk of a summit of world leaders had taken the sting out of the weekend's meetings.

However, Rob Portman, the US Trade Representative, said a clearer view had emerged of where the trade-offs for a pact may lie. He said: "We can understand the good, the bad and the ugly of what a potential deal might look like."