The World Trade Organisation has called for concerted efforts by members to identify linkages and trade-offs between and within sectors for a balanced set of agreements by January 2005.
It has asked countries to undertake domestic reforms and said negotiations should not deter them from unilateral liberalisation.
In its annual report for 2003, the multilateral institution has identified progress in international trade negotiations and managing tensions in economic and trade relations as the key challenges to the global economy.
The other challenges listed include restoring stability, rebuilding business confidence and balancing the need to reduce terrorism risk with the objective of facilitating trade.
On the present round of multilateral trade talks launched in Doha in 2001, the WTO said negotiations in a large number of areas would be difficult and progress in the early stages would be slow with members defining their interests before understanding the issues at stake and the point of view of trading partners.
The annual report said "considerable progress" had been made on a number of issues in agriculture, though the gaps in positions taken by different members on key areas were yet to be bridged.
While some members are seeking greater market access, substantial reduction in domestic support and phasing out of export subsidies, others want gradual reforms to balance trade liberalisation and non-trade concerns.
"Bringing these gaps closer is one of the most important and difficult challenges faced the members," the report said.
It has pinned hopes on the liberalisation of services trade and has said living standards will be raised by the greater choice of goods and services at lower prices.
Making a case for initiatives on unilateral liberalisation, the report said, "The launching of negotiations should not prevent members from opening up their markets further in the context of domestic reforms.
As some members, notably Australia, Hong Kong, China, India and Singapore, have shown, unilateral liberalisation can also be in national interests."
It said significant gains ranging between $250 billion and $620 billion a year could be unleashed if members agreed to the elimination of barriers in merchandise trade.
Similarly, removal of agricultural subsidies is estimated to raise global economic welfare by $128 billion, with $30 billion going to the developing countries.
The WTO said the multilateral trading system supported global trade recovery during 2002, when merchandise trade grew 2.5 per cent, against a 1 per cent fall in 2001.
Services trade climbed 5 per cent in 2002 over the previous year. "This was made possible by adherence to the rule-based system, commencement of WTO negotiations, continuing accession of new members and effective resolution of trade disputes," it said.
