A World Trade Organization (WTO) draft deal to open up farm and manufacturing commerce has provided a "path forward" to ending seven years of frustrating talks on a new global-trade pact, the top United States negotiator said Friday.

US Trade Representative Susan Schwab said, after a meeting of more than 30 countries, that many issues remained to be resolved if the WTO were to reach a framework deal slashing farm subsidies and cutting agricultural and industrial tariffs around the world.

Trade officials said a compromise proposal laid out Friday by WTO chief Pascal Lamy finally cajoled major countries into making tough decisions.

It calls for cutting limits on European farm subsides by 80 per cent and US payments by 70 per cent.

trade-distorting support

That, however, would not entail a reduction in overall spending for the US, which paid out only US$9 billion last year in trade - distorting support to American farmers, but would still be allowed to increase that to about US$14.5 billion.

The compromise proposal also proposes cuts in tariffs on the most penalised agricultural imports in the rich world, which the US and Latin American exporters such as Brazil and Argentina have sought. But European and other developed countries would still be allowed to designate up to four per cent of farm goods as "sensitive", meaning they are shielded from steep tariff cuts.

In goods trade, Lamy's offer also contains concessions for both rich and poor countries.

It gives developing countries a choice for industrial tariff caps from 20 to 25 per cent. The steeper the cuts developing countries chose, the more loopholes they receive to protect strategic industries, such as automobiles.