Ministers from nearly 160 member countries of the World Trade Organisation entered a final day of negotiations on Friday with officials sounding optimistic over chances of salvaging a deal that would save the WTO from sliding into irrelevance.
"We are very close," WTO spokesman Keith Rockwell told reporters at the meeting on the Indonesian resort island of Bali. "As things stand now, the prospects are promising."
Earlier this week a deal had looked in doubt, largely due to India's insistence that it would not compromise on a policy of subsidising food for its hundreds of millions of poor.
WTO Director-General Roberto Azevedo, a former Brazilian trade negotiator, told delegates at the start of the last day of talks that there was more work to be done, but sounded upbeat on prospects for success.
"He told members they were now very close to something that has eluded us for many years and that the decisions over the next few hours would have great significance beyond this day," the spokesman said.
It is 12 years since the WTO launched the Doha Round, but the negotiations have yet to yield any concrete results, having started out with a far more ambitious agenda. Diplomats have warned that failure in Bali would wreck the WTO's credibility as developed nations turn towards regional and bilateral trade arrangements.
A Bali trade deal, already diluted to the "low-hanging fruit" of the Doha Round, largely hinges on India and whether the world's second most populous country can find common ground with the United States and other developed countries on food subsidies.
India, whose government faces the risk of losing elections next year, says that its tough stance has drawn support from developing countries in Asia, Africa and South America, though the meeting's hosts Indonesia have been pressing for it to soften its stand.
"We are trying to get justice for the poor people," Indian Trade Minister Anand Sharma told reporters as he entered the meeting's last day.
Thursday's talks had stretched into the early hours of Friday without reaching any agreement.
Asked if there was a deal on the table, Sharma replied: "We are talking."
The meeting is set to end at 3.00 pm local time (0700 GMT) but can be extended.
However, two diplomats, who both asked not to be named, said negotiations were continuing and that ministers looked "very close" to an agreement.
India will next year fully implement a welfare programme to provide cheap food to 800 million people that it fears will contravene WTO rules curbing farm subsidies to 10 percent of production.
The programme, which relies on large-scale stockpiling and purchases at minimum prices, is a central plank of the government's bid to win a third term in office next year.
A proposal led by the United States offered to waive the 10 percent rule until 2017. But India has rejected it, demanding the exemptions continue indefinitely until a solution is found.
A TRILLION DOLLARS ON THE LINE
The trade talks also involve less contentious issues, such as assistance for the least developed countries and setting standards for handling the cross-border trade by removing red tape.
Estimates of the value of the Bali deal to the world economy vary, with some as high as $1 trillion. Experts say it would be far more important than abolishing import tariffs globally, since bureaucracy and opaque rules are a bigger brake on trade.
If talks were to fail, the WTO may see its role eroded by regional trade pacts now being negotiated, such as the U.S.-led 12-nation Trans-Pacific Partnership and a U.S.-EU tie-up known as TTIP.