Efforts to clinch a global free-trade deal remain beset by serious obstacles, Europe's chief negotiator cautioned yesterday as key players renewed efforts to secure agreement over some of the most critical crunch points in the talks.

After broadly positive discussions on Saturday about trade in services boosted hopes of an eventual breakthrough in the tortuous negotiations in Geneva, ministers were resuming talks yesterday over the more contentious areas of farming and industrial products.

However, Peter Mandelson, the European Trade Commissioner, gave a warning that big barriers to a deal remained to be overcome and said that despite signs of tangible progress the negotiations remained at a delicate stage. “There is no guarantee that the fragile package that began to emerge on Friday night will survive,” Mr Mandelson wrote in his daily blog from Geneva. “There are a number of potential potholes in the road.”

One stumbling block to agreement emerged yesterday in the form of a clash between developing nations over special arrangements to protect subsistence farmers from surges in imports of farm products when tariff barriers to these are reduced.

India is fighting to ensure the strongest possible safeguards for millions of its people who depend on subsistence farming and is at odds with South American food-exporting nations, led by Paraguay and Uruguay.

Under proposals tabled by Pascal Lamy, the World Trade Organisation (WTO) Director-General, a “special safeguard mechanism” would allow tariffs levied on imported food products to be increased by up to 15 per cent if imports jump by 40 per cent or more.

India is demanding the setting of a much lower trigger level at which tariffs could be lifted. One Indian diplomat in Geneva said: “We cannot have 40 per cent, it is too high. By the time it reaches 40 per cent, our people would have died.”

Despite this, Kamal Nath, the Indian Commerce Minister, struck an upbeat note. “The process of engagement is continuing. I am optimistic,” he said.

Mr Mandelson said, however, that Mr Nath was taking a hard line with big agricultural exporting states, such as the United States and Australia, over the question. “I have a feeling that this issue will go to the wire,” he said.

Trade in cotton and trade in bananas were other key items of contention in yesterday's talks.

After the European Union struck a deal early yesterday with South American banana producers to cut European import duties on the fruit, a group of African, Caribbean and Pacific producing nations accepted new tariff levels for bananas proposed by the WTO, but demanded a longer transition period for the changes. A deal over bananas, one of the longest-running trade disputes in the WTO, is vital to securing a breakthrough in the overall talks.

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