But demands from the United States and developing countries to reduce the number of permitted "sensitive products" - which have the highest import tariffs - to 1 percent of product lines are "too simplistic," said Switzerland's Economics Minister Joseph Deiss.

"The G-10 is willing to engage in constructive discussions in all three pillars under negotiation and will, in due time, submit new proposals on outstanding issues which are paramount to advance negotiations," said a statement from the group, which also includes

Japan, Norway and South Korea.

Negotiations at a meeting of the World Trade Organization's 149 members here are deadlocked, with developing countries blaming richer nations' intransigence over making deeper cuts to their farm aid.

Most criticism has been leveled at the European Union, which says it will not make any further offers on farm trade until it sees proposals from developing countries to reduce their trade barriers on industrial goods and service industries, the other two main areas of the negotiations.

A new proposal from the G-10 on sensitive products and domestic support payments to farmers is ready to be presented to other WTO members, either at the Hong Kong meeting or in Geneva, where the WTO is headquartered, Luzius Wasescha, Switzerland's chief negotiator, told reporters.

Deiss said each country should have the flexibility to set its own threshold for its number of import tariff-protected sensitive products, but declined to comment further on the details of the G-10 proposal.

Some countries have products they consider particularly sensitive to foreign competition, often products that are crucial to their domestic farming industries. Those products also include quality items known by the area in which they are produced - such as France's Champagne or Roquefort cheese.

EU trade chief Peter Mandelson said Tuesday the so-called Doha Round of trade liberalization talks should not focus solely on agriculture, as that is not always in the interests of developing countries.