Trade ministers will meet this week in Hong Kong for talks on a global trade liberalization deal, but deadlock over the key issue of farm subsidies has left little hope of significant progress.

Expectations for the biennial World Trade Organisation (WTO) ministerial meeting have been progressively downgraded following months of finger-pointing and arguments between the main protagonists.

The talks were supposed to sign off on an overall agreement whereby developed countries would open up their agriculture markets in return for free access for their industrial goods and services in the developing world.

The European Union, the United States, India, Brazil and Japan have all come up with proposals in the run-up to the six-day meeeting which opens Tuesday, but they have been unable to break the deadlock.

Falling back to prepared positions, they are now stressing instead that the talks should at least reach some sort of agreement to help the less developed and poorest countries benefit from freer trade.

It is hoped such a deal would prevent a repeat of the debacle at the previous WTO ministerial meeting in the Mexican resort of Cancun in 2003, which ended in acrimony.

A political compromise in Hong Kong would also keep alive the so-called Doha Round of free trade negotiations launched in Qatar in 2001, and maintain hopes the round could be concluded next year as planned with a global free trade agreement.

The build-up to the Hong Kong talks has been marked by bitter exchanges and growing calls for the European Union to offer bigger cuts in the huge subsidies it gives to its farmers.

The EU commission has offered agricultural tariff cuts of between 35 and 60 percent, with the overall average to be reduced from 22.8 to 12.2 percent.

Washington meanwhile has offered cuts of 55 to 90 percent, contrasting its willingness to bite the bullet with the EU"s reluctance to make the hard choices for a global trade accord.

EU Trade Commissioner Peter Mandelson has also demanded that in exchange for concessions on farm trade, emerging market countries in particular must allow greater access for EU industrial products and services.

Developing nations have been pressing both the EU and the United States to reduce tariffs and subsidies, arguing that until they do farmers in poor countries will be unable to compete fairly in world markets.

Mandelson has robustly defended the grouping"s stance and warned that no further offer on agriculture will be forthcoming.

The United States has also called for all nations to make compromises, but it has warned the EU that without progress on agriculture the developing world would never embrace change on other fronts.

"What we need is for all sides to show flexibility," said the International Monetary Fund"s chief economist, Raghuram Rajan. "What we need is more negotiations and less initial positions."

The WTO was established in 1995 to boost global trade by ending protection as much as possible, overseeing agreed rules through an arbitration system when necessary to provide equal market access.

Based in Geneva, the WTO now counts 149 members, of whom about three-quarters are developing countries. Saudi Arabia joined on Sunday.

The WTO has become a magnet for protests by the anti-globalisation movement and thousands of protesters were scheduled to stage rallies throughout the meeting in Hong Kong.

Fearing a repeat of violence that has accompanied previous meetings, the authorities in Hong Kong have mobilized a huge security operation, deploying over 9,000 police and sealing off the convention center where delegates are due to meet.

However the first protest on Sunday passed off peacefully.

"Sink the WTO" and "Keep WTO out of agriculture" read many banners as up to 4,000 people, many dressed in colourful costumes, marched through the streets in a carnival-like atmosphere.

<##IMAGE##>