(Adds warning from U.S. lawmakers against rush to deal)
By Jonathan Lynn
GENEVA, Dec 2 (Reuters) - Trading powers are edging towards a meeting to secure a breakthrough in long-running trade talks but big gaps need to be closed before ministers can meet with any hope of success, diplomats and officials said on Tuesday.
One of the toughest areas remains proposals to eliminate tariffs in certain industrial sectors as part of broader efforts to free up commerce in manufactured goods.
These sectoral deals could yet prove a stumbling block to a meeting of ministers widely expected later this month, just as a meeting in July collapsed over a measure to safeguard farmers in developing countries from a surge in imports, said the chairman of industrial goods talks at the World Trade Organisation (WTO).
"I wouldn't qualify it as a dealbreaker, but it's a serious, difficult question which has to be put on the adequate track," Switzerland's WTO ambassador Luzius Wasescha, who mediates the industry talks, told a briefing.
Leaders of the G20 rich and emerging countries called last month for ministers to reach an outline deal in the core areas of agriculture and industrial goods by the end of this year.
A framework deal in the WTO's seven-year-old Doha trade round to open markets in food, manufactured goods and services, would boost business confidence and help counter the financial crisis, they believe.
HANDFUL OF CONTENTIOUS ISSUES
Wasescha said he was confident he could resolve most other industrial goods issues before ministers arrive in Geneva.
WTO Director-General Pascal Lamy told the United Nations Conference on Trade and Development that he hoped the WTO would meet at ministerial level in around two weeks' time.
And in Brussels, the European Union's top trade official, Catherine Ashton, who is a keen supporter of an early deal, said WTO members were inching towards a meeting in the coming weeks.
"Ministers will need to focus on the small handful of contentious outstanding points and decide if and how middle-ground solutions can be found," she told members of the European Parliament.
"We should not fool ourselves, however great the political and economic momentum, this is no done deal," she said.
Four senior U.S. lawmakers warned President George W. Bush against rushing during his final weeks in office to reach a trade agreement that could end up being rejected by Congress.
"We have strong doubts that a ministerial meeting at this time can achieve the breakthrough that actually provides the new trade flows needed to spur the global economy and help deliver on Doha's development promise," the bipartisan group said in a letter to Bush.
Wasescha said he expected to issue a revised negotiating text to serve as a blueprint for ministers by the end of the week. But as this must be discussed further with members, it could take until the weekend, a couple of days after a similar draft expected for agriculture.
The industry talks aim to cut tariffs across manufactured goods, with various exceptions for developing countries.
But beyond that, the United States and other exporters are also keen to open markets in specific sectors such as textiles or chemicals by getting major emerging countries such as China and Brazil to sign up to voluntary deals that drive duties down to zero or close to it.
Wasescha said sectoral deals were so sensitive that only ministers would be able to resolve them.
Another tricky problem likely to end up with ministers was how to balance the needs of the poorest developing countries who enjoy preferential access to rich U.S. and EU markets, with the desire of other developing country exporters who want to see barriers to those markets come down, he said.
In agriculture, complex issues include U.S. cotton subsidies and proposals to allow countries to shield politically sensitive products from the full force of tariff cuts.
And the safeguard for poor farmers remains unresolved.
U.S. lobbyists are warning the outgoing administration from rushing into a deal that fails to prise open markets, and four senior U.S. lawmakers said any rushed deal could end up being rejected by Congress.
"We have strong doubts that a ministerial meeting at this time can achieve the breakthrough that actually provides the new trade flows needed to spur the global economy and help deliver on Doha's development promise," the bipartisan group said in a letter to Bush. (For a FACTBOX on issues in the talks, click on [ID:nL2380210]) (Additional reporting by Darren Ennis in Brussels and Doug Palmer in Washington; Editing by Michael Roddy)