World Trade Organisation discussions, which collapsed six months ago, are currently on a knife edge, with the possibility of success as we enter the end game in these crucial talks, which will end either in success or failure in the next few months, Mandelson told a conference in London on Thursday.
The Doha Round of talks, named after the Qatari capital where they began in 2001, caved in last July as the US resisted pledging further cuts in its agricultural payments without steep reductions in the farm tariffs of India, the EU and Japan.
A trade deal would pump at least $96 billion into the world economy, the World Bank estimates. Trade officials from those countries are to meet later this month in Davos, Switzerland, in an attempt to reanimate the negotiations. The talks may stall until 2009 unless negotiators clinch an accord before US President George W Bushs negotiating mandate from Congress expires in July, WTO Director- General Pascal Lamy has said. The EU has said its willing to sweeten its offer by adding substantially to the 39% average reduction in farm duties it submitted a year ago. Europe is ready to add more than 10% points and get within close reach of the average farm tariff cut demanded by developing countries, 51.5%, the European Commission said earlier this month.
In return, the EU wants the US to make real cuts to farm subsidies to levels near to those demanded by developing countries. This would mean a cut of about $8 billion from current ceilings of $23 billion, according to the commission, the blocs executive arm in Brussels. Rob Portman, Bushs budget director, said earlier this month that farm payments, which totalled $16.5 billion last year, would be a target for reductions in the federal budget Bush will submit to Congress on February 5.