WRAPUP 2-Lamy urges WTO members to bridge gaps

* WTO chief Lamy calls for flexibility as weighs meeting

* Revised negotiating texts retain July compromises

* Big gaps still on farm safeguard, cotton, sector deals

By Jonathan Lynn

GENEVA, Dec 6 (Reuters) - World Trade Organisation (WTO) Director-General Pascal Lamy urged member nations to show flexibility and narrow their remaining differences as he weighed whether to call a meeting to reach a new trade deal.

Lamy was talking as mediators of the WTO's core agriculture and industrial goods talks issued new negotiating texts that would serve as blueprints for an outline deal, known in WTO jargon as modalities, in the seven-year-old Doha round.

"With these revised texts we are closer to our goal of clinching modalities in agriculture and industry, a stepping stone towards the conclusion of the Doha Round," Lamy said.

"This is not the time for unrealistic demands. Nor is it the time for inflexible stances. This is the time for collective moves towards global solutions," he said in a statement.

Leaders of the G20 rich and emerging countries called last month for an outline deal in the Doha talks by the end of this year to counter the worst economic crisis since the 1930s.

PROTECTIONIST THREAT

A deal to open up world trade would banish the spectre of protectionism which contributed significantly to the Great Depression that followed the 1929 Wall Street Crash.

And its promise of new market opportunities would boost business confidence in rich and poor countries alike.

But the revised negotiating drafts made it clear that big gaps remain on several sticky issues, so that any meeting this month would not be guaranteed success.

The talks were launched in the Qatari capital in late 2001 to free up trade in goods from food to clothing and cars as well as services like banking and telecoms, while helping developing countries export their way out of poverty.

But a deal has proved elusive for the past seven years as rich and poor countries and exporters and importers squabble over the need to create new business opportunities while protecting sensitive industries and farm sectors.

Australia, Brazil and the European Union are pushing hard for a meeting and a deal. But the United States and India have shown recently that they are more sceptical.

If a meeting is to take place, Lamy has indicated it would probably be around next weekend, meaning he would have to decide by Monday whether to go ahead.

Both New Zealand's WTO ambassador, Crawford Falconer, who chairs the farm talks, and his Swiss counterpart Luzius Wasescha, who mediates industry, banked compromises from a meeting of ministers in July on overall cuts to agricultural subsidies and farm and industry tariffs in their latest texts.

Those would see the limit for EU farm subsidies fall by 80 percent, while the ceiling on U.S. farm subsidies would drop 70 percent to $14.5 billion -- still above current outlays of about $7 billion but well below the current ceiling of $48.2 billion.

Industrial tariffs in developed countries would be capped at 8 percent, while in developing countries subject to tariff cuts their ceiling would average 11-12 percent, with a maximum of 25 percent.

And in an "anti-concentration clause", developing countries would not be able to use waivers to shield entire industrial sectors from lower duties -- a key U.S. and EU concern.

But Falconer said more work needs to be done on a safeguard to protect farmers in poor countries from a surge in imports through a temporary rise in tariffs -- the issue on which the July talks foundered.

India wants a mechanism to protect the livelihoods of its 600 million subsistence farmers from the uncertainties of volatile world markets flooded with subsidised produce from rich countries.

But the United States and developing country exporters like Uruguay fear the safeguard could be abused to choke off the normal growth in farm trade.

The dispute centres on what increase in imports would be needed to trigger the safeguard, in what conditions tariffs could rise over current "pre-Doha" levels, and how quickly an increase could be reimposed after it was lifted.

In industry, Wasescha says more work is needed on proposals to eliminate tariffs in individual sectors like chemicals.

The United States is insisting these sectoral deals should be part of an agreement, as it sees them offering the best chances for new export opportunities. But big emerging countries like China insist that sector deals must be voluntary. (Editing by Keith Weir)