Sunday, November 27 2005 11:45 Hrs (IST) - World Time -

London: Echoing India's concerns, British Prime Minister Tony Blair has warned that it would be disastrous for the global economy if world leaders failed to agree to a deal at next month's Hong Kong summit of the WTO.

As Commonwealth leaders meeting in Valletta in Malta began an informal retreat at which they were due to discuss international trade including the so-called Doha Round, Blair yesterday called for a redoubling of efforts to secure a deal on trade barriers.

The Sunday Telegraph quoted Blair "This is an absolutely critical moment of decision for the whole World Trade Organisation," as saying.

"If we do not get significant movement in Hong Kong and subsequently, then there is a danger that the round fails. That would be disastrous for economies, both developed and developing," he said.

Next month's talks are aimed at opening up global markets to producers from the developing world but, despite a pledge by the G8 group of industrialised nations to get a deal by the end of the year, expectations of agreement are fading.

Blair said talks between European Union finance leaders, which Gordon Brown, the Chancellor, will chair in London next weekend, could pave the way for a breakthrough in Hong Kong, which in turn could generate 350 billion pounds a year in additional trade.

EU trade commissioner Peter Mandelson has urged other WTO members to give some ground on tariffs on industrial goods and liberalising trade in services, in return for efforts to bring down EU farm subsidies, the report said.