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Negotiators at the World Trade Organization say they are running out of time to reach a deal in the troubled Doha Round talks.

While earlier reports indicated that some progress was being to bridge the wide gaps between countries on the critical issues of subsidies and tariffs for agricultural and industrial products, diplomats in Geneva are now saying that deep divisions remain, raising further doubts about prospects for a breakthrough in the talks by the end of July.

In a speech to the G8 Summit at Heiligendamm, Germany, WTO Director General Pascal Lamy underlined the growing sense of urgency by calling on the G8 leaders to do more to revive the talks and “not to let this opportunity slip through your fingers”.

“While my diagnosis remains cautious, I think that an agreement is now within our reach,” Lamy said.

Despite Lamy’s “cautious optimism”, however, there are signs that reaching even a modest framework deal could be in trouble. At the same time as Lamy was addressing the leaders of the G8, several major developing countries announced that they have no intention of accepting deeper cuts in tariffs on industrial imports as part of the talks on non-agricultural market access (NAMA).

At a meeting of the World Trade Organization’s NAMA negotiating group on June 8, the alliance of developing countries known as the NAMA-11— including Argentina, Brazil, India and South Africa — insisted that they must have the right to exclude some products from the tariff cuts being proposed by developed countries led by the United States, the European Union, and Switzerland.

The persistent gap in positions led the chair of the NAMA discussions, Canadian Ambassador Don Stephenson, to admit at the end of a week long set of talks that there was “no consensus” on the critical issues. Stephenson told negotiators he would prepare a draft negotiating text by June 25 to serve as the basis for continuing talks in Geneva.

Meanwhile, trade diplomats are reporting some tentative movement in agricultural talks. New Zealand’s Ambassador Crawford Falconer, chair of the agricultural negotiating committee, is expected to issue a new draft text later this month which is expected to outline a formulae for tariff and subsidy cuts as well as special exceptions for sensitive products.

Last month, Falconer released a “challenges” paper describing areas in the negotiations where he thought consensus might be found. Negotiators described the discussion of the paper as a positive one, but nevertheless warned that fundamental differences remain. China’s Commerce Minister Bo Xilai and Agriculture Minister Sun Zhengcai, for instance, expressed appreciation for Falconer's efforts, but pointed to a “fundamental problem” that the concerns of developed and developing country Members were not treated “in a balanced way.”

Meanwhile, the so-called G-4 group of major trading partners — Brazil, the European Union, India and the United States — will meet later this month in yet another attempt to bridge their differences.