By Steve Schifferes BBC News Online economics reporter in Paris

OECD secretary general Donald Johnston addresses the Paris event

Speaking to BBC News Online, French trade minister Francois Loos rejected a plan for massive subsidy cuts outlined by EU trade commissioner Pascal Lamy.

Mr Loos said the proposal should not have been made, as the European Union had already conceded enough ground. He warned France would be waiting for other countries to make concessions before accepting any trade deal.

But Australia's trade minister Mark Vaile told BBC News Online that he was "extremely optimistic" a breakthrough deal could be reached.

Trade ministers from around the world are currently meeting on the sidelines of a two-day meeting of the Organisation for Economic Co-operation and Development (OECD) in Paris.

They hope to breathe new life into World Trade Organisation (WTO) talks that have been hobbled by disagreements over agricultural policy, which collapsed last year at a meeting in Cancun, Mexico.

Fighting talk

A series of crucial meetings will be held on Friday, which could decide the fate of world trade negotiations.

Observers in Paris say Mr Loos' fighting talk could be a rearguard action before a French climbdown on trade. Many EU members have already signalled their support for Mr Lamy's proposals.

And US trade chief Robert Zoellick said there was a "better than fifty-fifty chance" of success at the talks in Paris.

Australia's Mark Vaile for his part described the Lamy plan as a "significant advance" and predicted that now everything was open for negotiations.

On Friday, Mr Vaile will be chairing a meeting between the Cairns group of agriculture exporting countries and the wider G20-plus group of developing nations, including Brazil and South Africa.

Together they will try to agree a wide-reaching deal on agriculture that could save the Doha trade round. Last autumn, the G20 blocked a trade deal in Cancun, because they believed it did not open markets enough for their agricultural products.

According to Mr Vaile, the most difficult remaining issue is whether developing countries will agree to open their markets for agricultural products if developed countries agreed to do the same for theirs.

But the Australian trade minister also warned that time was the enemy and that there was only a narrow window of opportunity until July this year to agree a framework for further negotiations.

Then the US presidential elections are expected to take centre stage, while Mr Lamy will leave office together with the rest of the outgoing EU commission.

Restart?

On Friday afternoon, ministers from WTO member states will hold an informal meeting to decide whether to take the proposals forward.

"At the end of this meeting we may have the basis for a re-initiation of the Doha round," Mexican Foreign Minister Luis Ernesto Derbez told journalists.

Now Mr Lamy - much to the annoyance of the French - seems prepared to abolish all agricultural export subsidies, which gives rich country exports an unfair advantage on world markets.

The US has already indicated that it will support such a deal, and the key question now is whether the G20 countries are prepared to give it their backing.

And the EU has abandoned attempts to include most of the so-called "Singapore issues" (such as a global deal on investment) in the trade talks, something the G20 had also demanded.

The G20 will no doubt be pressing for further concessions, particularly in relation to the generous subsidies to cotton producers in the US and sugar producers in the EU.

Trade unions, meanwhile, will continue to fight for the inclusion of "core labour standards" in any trade deal, John Sweeney , president of the US trade union movement AFL-CIO, told BBC News Online.

He said US trade unions had received a commitment from US presidential candidate John Kerry that if elected he would review any existing trade negotiations with a view of incorporating these standards.

The "core labour standards" were drawn up the International Labour Organisation (ILO), an affiliate of the United Nations, and include the right of free assembly, the right of workers to form trade unions, and the banning of forced labour and child labour.

However, the ILO has no power to enforce these standards.

Timing

Whether these can be delivered in an election year in the US is still debatable.

But there is no doubt that unless a deal is done on agriculture soon, the whole Doha round of trade talks - which was due to finish this year - is threatened with collapse.

The planned meeting in Hong Kong to wrap up the talks this autumn has already been postponed, and Mr Lamy himself - a driving force in the negotiations - will be replaced this autumn when new EC commissioners are chosen.

Mr Bush is under intense pressure not to make further concessions on trade - an issue which his opponent, John Kerry, is campaigning hard on in key union states like Ohio.

To emphasise the point, the head of the US trade union federation, John Sweeney, has also come to Paris to speak on the importance of including labour rights in any future trade deal - something that was rejected in Doha.

At this delicate stage in the trade negotiations, it is noticeable that the head of the World Trade Organisation, Supachai Panitchpakdi, has cancelled his planned speech on Thursday.