Troubled global trade talks showed encouraging signs of edging towards a deal on Friday despite remaining differences among seven key countries, ministers and officials said.

The new proposals breathed life into the make-or-break talks at the World Trade Organisation (WTO) which earlier on Friday were at risk of collapse.

"What's on the table is not perfect, it's not beautiful but we’ve finally put together what will be a genuine boost for the world economy and particularly good for developing countries," European Trade Commissioner Peter Mandelson said after a make-or-break meeting of trade ministers.

However, Indian Commerce Minister Kamal Nath sounded more cautious, saying: "There are certain areas of concern, there are certain areas of consensus."

Argentina, for its part, described the latest proposals as “unacceptable.”

US Trade Representative Susan Schwab hinted that disagreements with those countries had not been overcome. "I think the biggest concern that we have is that a handful of large emerging markets really threaten this round for the rest of us," she said.

Lamy's proposals

WTO Director-General Pascal Lamy had warned earlier that the talks in the long-running Doha round risked collapsing if members failed to narrow their differences.

In a bid to rescue the negotiations Friday afternoon, he presented a fresh set of proposals to seven key trading powers – the European Union, the United States, China, Japan, Brazil, India and Australia – who have been locked in intensive talks at the WTO.

According to the latest proposals, known as the Lamy text:

- The European Union would see its farm payments cut by 80 percent to 24 billion euros, which fits with an earlier undertaking by Brussels. The US would cut their own farm subsidies to 14.5 billion dollars – they had agreed on a 15-billion ceiling on Tuesday.

- European agricultural tariffs that are currently at or above 75 percent would be cut to 70 percent.

- Developing countries would be allowed to classify 12 percent of their products as "special," which would partially shield them from tariff reductions. Developed economies would be able to designate 4 to 6 percent of products as "sensitive" to be same effect.

- A special safeguard mechanism would allow countries to impose protective tariffs in case of a surge in imports of a particular agricultural product.

- On industrial products, developing countries would be able to set tariffs with a coefficient of 20 to 25 which will determine the scale of cuts according to a complicated WTO formula.

- The text also includes a so-called "anti-concentration clause" that would prevent developing countries from shielding entire sectors of their economies from tariff cuts.

Five of the seven powers reacted favourably to the draft agreement but India and Japan were less than enthusiastic, a diplomatic source said.

If WTO delegates reach an agreement, Mandelson is due to present the proposals to EU member states on Saturday. France, currently president of the bloc, and other countries have previously expressed concern about European farming concessions needed to get a WTO agreement and may veto the deal.

In a sign of optimism, the WTO called its delayed "signaling conference" on services for Saturday afternoon. That session, scheduled to take place only if an agreement is reached on agricultural and industrial products, will give negotiators interested in improved access to other countries' services sectors, such as banking and telecoms, an idea of the prospects for liberalisation.