EU trade commissioner Peter Mandelson has warned that failure in the Doha round of world trade talks threatens the credibility of the World Trade Organisation (WTO).
In an analysis of the situation in the talks yesterday, he also told rival negotiators not to be tempted by the "false comfort of inflexible and entrenched positions".
Mr Mandelson said he welcomed comments made this week by US President George Bush in support of a successful round, but warned that a new US offer was needed. "I applaud the desire of the US to press for the most ambitious possible outcome to this round. But you cannot get that simply by pushing others to move," he said in a speech ahead of crucial trade talks in Geneva next week.
Trade ministers from more than 50 WTO countries are due to meet in Switzerland in a bid to overcome the current impasse over liberalising farm and industrial products.
The US has accused the EU of not moving far enough in its current proposal to lower tariffs on agricultural products to give a boost to the WTO's Doha round.
However, the EU and some big developing nations such as Brazil say that the US must propose further cuts in the subsidies that it offers farmers before they will make any further concessions on tariffs in the areas of farming, industrial products and services.
The Doha round, launched in 2001 to boost the world's economy and help poor countries, is two years behind schedule and some fear in deep trouble. However, Mr Mandelson said yesterday he was "most encouraged" after President Bush said Washington was committed to the round at the EU-US summit in Vienna.
"There is a three-way bargain here. The G20 (group of developing nations) wants steeper cuts in US farm subsidies before it is willing to table the required cuts in industrial goods. Washington can unlock this by stepping forward with a better offer,"he said.
Mr Mandelson said that if the US took this step, the EU would meet them with a strengthened offer of their own.
In October, the EU proposed average cuts of 39 per cent in tariffs levied on agricultural imports. However, the G20 group of countries is seeking cuts of 54 per cent. French and Irish farmers fear that Mr Mandelson will sell them out in next week's talk by proposing cuts in agricultural tariffs that would undermine the common agricultural policy (CAP).
Most observers believe that significant progress in the talks will not be made until July. If there is no breakthrough before the summer, chances of an overall deal will recede ahead of a deadline next year.
Mr Mandelson said failure would mean states losing the conviction that the WTO system could function with a membership of 150 countries.
