(GENEVA) - Developing countries must make "real" cuts in industrial tariffs if critical trade talks here this week are to succeed, the European Union warned on Monday, saying that this was a crucial condition.

"A limited number of developing countries must accept tariff cuts" on industrial goods as determined by an agreed coefficient, EU Trade Commissioner Peter Mandelson told delegates.

Mandelson, who is under strong political pressure to harden his stance on industrial issues, said: "They must be real. These cuts must provide some new market access in practice.

"That is the political bottom line. Nothing else will work for us. Nothing else will close the deal."

Brazil's foreign minister Celso Amorim, who leads his country's delegation at the WTO talks, said over the weekend that current proposals would oblige Brazil to reduce its customs duties on half its imports.

He also said that Brazil's highest duties would come down by a third from about 35 to 25 percent.

The so-called Doha Development Round of negotiations was launched with great fanfare in the Qatari capital in November 2001.

It has been deadlocked as developed and developing countries show brinkmanship over concessions on issues such as agricultural subsidies and tariffs on industrial goods.

Any draft agreement thrashed out here would then have to go before all 152 members of the World Trade Organization.

Mandelson said that the talks were being "watched closely," and that "we need good news from Geneva this week."

The EU trade commissioner will be under particular scrutiny from his own side following a public confrontation with French President Nicolas Sarkozy, who accused Mandelson of overstepping his mandate and offering too much on agriculture subsidies.

Mandelson said Europe was prepared to make "painful" cuts in its payments to farmers but only if it received guarantees of progress on other topics such as industrial tariffs, the services sector and "geographical indicators" for key products such as certain types of wine or cheese.

"We are prepared to offer more than others in this round, but everyone must understand that we need something in return," he said.

Under the proposals currently on the table, the EU would slash its average agricultural tariffs by a minimum of 54 percent, making the 27-nation bloc a "major net loser" in agriculture terms, Mandelson said.

"In Europe, this once-in-a-generation effort will be painful. But it is on the table now because of our commitment to this Round and the multilateral trading system. It will not remain on the table indefinitely," the EU trade chief said.

Proposals drawn up by the WTO's chief agricultural negotiator, New Zealand ambassador Crawford Falconer, envisage sweeping subsidy cuts by rich Western countries which have often been accused by developing nations of undermining free trade and pushing their farmers into penury.

The biggest subsidisers will make the biggest cuts, notably the EU which will have to slash its payments to farmers by between 75 and 85 percent, and see its maximum subsidy threshhold fall to a maximum of 27.6 billion euros (44.1 billion dollars) from 110.3 billion euros currently.

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