Recriminations begin as hope for world trade deal dims

(GENEVA) - Hopes for a new global trade pact dimmed sharply Monday as a blame game broke out between major trading powers and a fracture opened within a key bloc, the European Union.

As day eight of the marathon talks stretched into the evening, the United States accused India and China of delaying progress towards an agreement.

The EU's position also looked shaky, meanwhile, as nine countries within the bloc called on the EU's chief trade negotiator Peter Mandelson to take a tougher line against big emerging countries.

The bargaining is aimed at securing consensus on measures to reduce barriers to global commerce under the Doha Development Agenda, which has repeatedly foundered since it was launched in the Qatari capital seven years ago.

Talks since last Monday among ministers from about 35 key trading economies appeared to make a breakthrough on Friday, but optimism about a deal dimmed over the weekend as emerging economies held out for better terms.

On Monday, the United States pointed the finger at India and China, accusing them of holding up progress towards a deal.

"That's a real risk because those countries are advocating selectively reopening the package," said US Trade Representative Susan Schwab during a break after a five-hour meeting with her counterparts from India, China, Australia, Brazil, the European Union and Japan.

"Therefore there is a real threat to a delicate balance we've achieved on Friday night and I'm concerned it will jeopardise the outcome of this round," she added.

Schwab did not mention names, but the United States in a morning meeting with all 153 member states had accused India and China of threatening to shatter a deal reached over the weekend by key parties in Geneva.

"Their actions have thrown the ... Doha development Round into the gravest jeopardy of its nearly seven-year life," said David Shark, the US deputy head at the Geneva mission to the World Trade Organisation, in a statement.

"All their invocations of development during the past years ring hollow when these major players threaten the development benefits already on the table."

The accusations met with a sharp retort from the Chinese diplomats attending the meeting said.

Chinese Ambassador Sun Zhenyu said that China had "tried very hard" to contribute to a successful round.

"It (China) is a little bit surprised that at this time the US started this finger pointing," he told the meeting.

He turned the tables on the US, arguing that while Washington had offered to cut the ceiling of its agricultural subsidies to 14.5 billion dollars, the actual annual spending was only 7-8 billion dollars a year.

That implied that the US could lower the subsidy limit further whilst still increasing subsidies.

"Where is the new market access to the developed countries?" asked Sun.

India's Commerce Minister Kamal Nath also bluntly rebutted the US charge.

"We are not holding up the talks," he told AFP on the sidelines of Monday morning's meeting.

"Who's holding up this round I think are the large developed countries ... who are looking for commercial interests and enhancing prosperity rather than looking for content which reduces poverty."

After a meeting with the six other trading powers, Nath said he was "still optimistic" a deal could be reached.

"There is no doubt in anyone's mind... that at the start on Friday, I'd said that India does not agree," Nath said. "On all elements of the package we have serious concerns."

He added, however, that the "good news is that we're continuing to negotiate."

Meanwhile, a fracture opened up within the EU, as nine countries in the bloc -- France, Ireland, Poland, Hungary, Greece, Portugal, Lithuania, Cyprus and Italy -- asked Mandelson to get a better deal for the grouping.

"For too long, Europe has got way too little from emerging countries like India, China and Brazil in exchange for its concessions," a spokesman for Italy's chief negotiator Adolfo Urso told AFP, putting pressure on Mandelson.

"We will only get to a resolution if people stretch, if people show leadership, and show some flexibility," the British EU commissioner said in a break in talks.

"But this is a very difficult moment."