Trade ministers from 35 countries are meeting in the Indian capital to discuss how to bridge differences which have stalled efforts to reach a global trade pact.
The two-day "informal meeting" of trade ministers is being hosted by India to revive trade negotiations being held by the World Trade Organization.
The talks, known as the "Doha Round" collapsed last year, casting serious doubts over the possibility of hammering out a global trade deal under discussion since 2001.
However, WTO director general Pascal Lamy struck an optimistic note in New Delhi on Thursday, saying ministers will map out how to conclude the talks by next year.
|WTO Director General, Pascal Lamy arrives at the WTO ministerial meeting in New Delhi, India, 03 Sep 2009|
A key stumbling block has been the insistence by emerging nations led by India that the pact must include measures to protect poor farmers from the impact of liberalized trade.
India and developing countries fear that cheap food imports from the U.S. and European Union could threaten the livelihood of millions of farmers in their countries. They want big countries to radically reduce farm subsidies.
Economist C.D. Wadhva at New Delhi's independent Center for Policy Research says the developed and developing countries appear to have narrowed down their differences.
"So some compromise appears to have been hammered out which will be discussed," he said. "Issues of agriculture subsidies will be sorted out to mutual satisfaction."
Economists stress that it is important to move forward with trade talks at a time when the world is trying to recover from the worst recession in decades. They say that failure to reach a global trade agreement will strengthen protectionism in both rich and poor countries.
Economist Wadhva says India is anxious to see that the WTO negotiations make headway. He says New Delhi took the initiative in hosting a meeting because it does not want to be seen as the country responsible for the failure to reach an agreement on the pact.
"It is a diplomatic effort to clear India's image. India is certainly not against concluding, it is in fact very much more in favor of concluding the Doha development round, which has been going around for a very long time," said Wadhva.
Top industrial nations and five emerging economies including India and China have agreed to conclude a deal by the end of 2010. The aim of the Doha round of talks is to boost global commerce by reducing tariffs and other trade barriers.