World trade talks stall, atmosphere tense

By William Schomberg and Jonathan Lynn

GENEVA (Reuters) - Progress towards a global trade deal ground to a halt on Monday as the United States clashed with China and India over access to their rapidly growing markets and key European Union states demanded better terms.

"The situation is very tense. Things are finely balanced and the outcome is by no means certain," World Trade Organisation spokesman Keith Rockwell told reporters, as key WTO ministers resumed talks shortly after midnight.

Negotiators battled over a "special safeguard mechanism" intended to help poor countries protect their farmers against import surges, with agricultural exporters like Costa Rica, Paraguay and Uruguay pitted against other developing countries.

The row about the safeguard blocked all other discussions on Monday, preventing the WTO from issuing new negotiating texts to serve as the blueprint for a deal.

"We are very much concerned about the direction that a couple of countries are taking," U.S. Trade Representative Susan Schwab said during a break on the eighth day of World Trade Organisation talks.

"I am very concerned it will jeopardize the outcome of this round," she told reporters.

Her comments reflected strong differences over U.S. demands for major developing countries to agree to deep tariff cuts in at least some manufacturing sectors and China and India's insistence that developing countries be given a strong new tool to guard against agricultural import surges.

China's WTO ambassador Sun Zhenyu said the United States was refusing to budge on the safeguard, which he said developing countries needed to protect their subsistence farmers. But major WTO players were continuing to try to resolve the disagreement.