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UPDATE 2-World trade talks hinge on China, India, Brazil - US

Published 04/13/2011, 04:05 PM

* USTR Kirk urges big developing countries to open markets

* Kirk notes "anxiety" about finishing Doha round

* Analyst says "another breakdown" in talks a possibility (Adds analyst comments)

By Doug Palmer

WASHINGTON, April 13 (Reuters) - The fate of long-running world trade talks depend on whether China, India and Brazil are willing to make a deal that will open their markets to additional foreign goods and services, U.S. Trade Representative Ron Kirk said on Wednesday.

"If I can just be blunt, the question is whether they are willing to walk in the room, close the door and hammer out a deal," Kirk said in a speech at a trade symposium hosted by U.S. Customs and Border Protection.

The remark came a day after European Union Trade Commissioner Karel De Gucht warned that the nearly 10-year-old Doha round of trade talks were at a difficult stage and there was "no reason to be optimistic" about the chances of success.

"We're still at the table," Kirk said. "There's an anxiety that we may not get there. But we think it would be a real shame if we weren't able to find a way to rationalize global trade and get a Doha deal that works for everyone."

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, said Kirk and De Gucht's comments show the "precarious" state of the talks one week before the World Trade Organization is due to release new draft texts for the supposedly final stage of negotiations.

"I suspect there are last gasp efforts right now to try to avoid another breakdown," Schott said, referring to the numerous setbacks and missed deadlines in the talks since they were launched in late 2001 in Doha, Qatar.

"It's very hard to see how there would be a positive response to the secretariat's overtures unless there was some prospect that the major trading nations were going to offer more at the negotiating table," Schott said.

China, India and Brazil don't bear all the responsibility for the state of the talks, but each has its own reasons for resisting U.S. pressure for deeper market openings than they have offered so far, Schott said.

China argues it has already opened its market more than most developing countries, while Brazil and to some extent India worry about the competition their manufacturers will face from China if they make deep tariff cuts, he said.

Brazil, a major agricultural exporter, also has complained about the amount of farm subsidy and tariff cuts the United States and the European Union are willing to make in exchange for the new market openings they want.

Kirk said developing countries often complain that the United States and the European Union have long dominated the process of establishing the international rules for trade.

"We've gladly opened that door and shown them we have three more chairs: one for China, one for India and one for Brazil."

"No three economies have benefited more from trade liberalization over the last 10 years than China, India and Brazil. That's a good thing," Kirk said.

"But with that blessing comes a responsibility, and we believe China, India and Brazil have the opportunity to find out just how bloody awful it is to bring these things to a close," Kirk said.

Despite De Gucht's bleak assessment of the talks, Kirk said he thought substantial progress had been made over the past 18 months in persuading other WTO members that a draft July 2008 deal did not do enough to open markets to more trade. (Reporting by Doug Palmer; editing by Christopher Wilson)

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