Asia-Pacific leaders said on Sunday they saw real progress in world trade talks now underway in Geneva and pledged flexibility and the political will to forge a deal by the end of 2007.

The 21-member Asia Pacific Economic Cooperation forum (APEC) called on all nations to give the same commitment to reaching a conclusion to the drawn out Doha round of trade talks.

The Asia-Pacific leaders, whose economies account for more than half of world trade, said there was an urgent need to make progress in the World Trade Organisation (WTO) talks.

We pledge the political will, flexibility and ambition to ensure the Doha round negotiations enter their final phase this year. We call on our WTO partners to join in this vital effort, said the leaders' declaration after the two-day summit.

The leaders said it was critical to achieve early progress in the contentious sectors of agriculture and industrial products, and said their ministers would resume talks on the basis of proposed compromises on agriculture and non-agricultural markets.

Again, we call on our partners to do the same, they said.

But Malaysian Prime Minister Abdullah Ahmad Badawi cautioned it would be difficult to achieve a deal.

I find it very difficult to be optimistic of completion of the Doha round, simply because at the moment the major powers ... are not sufficiently flexible in order to help push forward the process, Badawi told reporters at the end of APEC.

U.S. President George W. Bush, who left the summit a day earlier to prepare for a key report on Iraq, said Washington was ready to be flexible and called the troubled Doha talks a once-in-a-generation opportunity.

Trade talks have stumbled over reducing farm subsidies in the United States, Europe and Japan, and scaling back industrial tariffs in emerging markets like China, India, Brazil, and South Africa. Many analysts doubt WTO countries can overcome their differences, and see the round slipping into hiatus for years.

But WTO Director-General Pascal Lamy said on Saturday trade negotiators may be edging closer to a deal. There is a strong sense that it's make-or-break moment, Lamy told CNBC television.

Trade diplomats returned to the negotiating table last week in an attempt to wrap up the Doha round, which was launched in the Qatari capital in November 2001 to help poor countries improve their lot through freer trade rules.

Lamy has repeatedly urged countries to complete the talks by the end of this year to avoid the negotiations running into the U.S. presidential election year, when Washington is expected to have little flexibility to negotiate.

CARBON TRADING

The APEC leaders also issued a climate change statement, calling for non-binding, unspecified aspirational targets to reduce greenhouse gas emissions, and for each member to cut emissions according to individual economic needs.

This is the first such agreement involving the major polluters -- the United States, China and the Russian Federation, said Australian Prime Minister John Howard.

Proponents say the Sydney Declaration creates consensus on the thorny climate change issue and will carry momentum into a series of meetings in Washington, New York and Bali, Indonesia about replacing the Kyoto Protocol, due to expire in 2012.

Green critics ridiculed the idea of aspirational targets and some developing APEC nations thought the declaration was a diversion from U.N. efforts to hammer out a post-Kyoto deal.

The declaration was seen as a compromise between rich and poor APEC economies, which together account for about 60 percent of the world's economy.

While we recognize that Kyoto Protocol has its flaws, it needs to be improved and strengthened - not weakened, Papua New Guinea Prime Minister Sir Michael Somare told fellow leaders.

But Howard insisted the Sydney Declaration was a milestone and part of the process of combating global warming.

No one meeting, no one agreement is going to fix this issue, Kyoto didn't fix it, he said. What this agreement represents is a proper recognition of the fact that different economies have different needs...

Everybody has to be involved but not everybody will make the same contribution, said Howard, who has previously said Kyoto is flawed because it excludes big polluters China and India.

Asia-Pacific leaders also agreed to take various steps to ensure the health and safety of the region's population, including counter-terrorism measures and food safety.

The action was not aimed at China, which has been grappling with a series of product recalls in a number of countries, ranging from toys to toothpaste, APEC host Australia said.

(Additional reporting by John Ruwitch)

Japan China Iraq South Africa