Trade ministers are close to agreeing a reform plan for the World Trade Organization, as wrangling continues over extending a moratorium on customs duties for electronic transmissions such as digital downloads, two diplomats said.

The talks at a WTO meeting in Cameroon include efforts to bridge differences between the U.S. and India over extending the e-commerce moratorium, which is due to expire this month.

Extending the moratorium - first adopted in 1998 as part of a declaration to encourage early digital trade growth - is seen as a test for the WTO's relevance, following a year of tariff-fueled trade turmoil and major disruptions due to the Iran war.

DRAFT REFORM PLAN TAKES SHAPE

After initial resistance from some WTO members, a new draft of the reform roadmap provides a timeline for progress and sets out the key issues to address, according to a copy of the draft seen by Reuters.

Those issues include improving decision-making in a consensus-based system that has long been stymied by a few countries, and the trade benefits extended to developing countries.

The reform debate comes amid efforts to rework WTO rules to render subsidy use more transparent and make decision-taking easier. The U.S. and the EU argue China in particular has taken advantage of current rules to their detriment.

Bringing into WTO rules an agreement reached by a subset of members aimed at boosting investment in developing countries also remains blocked by India, which said plurilateral accords risk eroding the body's founding principles.

E-COMMERCE AGREEMENT KEY FOR US SUPPORT

Alongside the reform discussions, a senior diplomatic source - speaking on condition of anonymity - said there was a possibility of a four-year extension to the e-commerce moratorium.

India indicated on Friday it would accept a two-year extension, diplomats said, while there were suggestions the U.S. could accept a 10-year extension, another diplomat said. U.S. Trade Representative Jamieson Greer said this week that Washington wanted a permanent extension.

A new draft document on e-commerce seen by Reuters proposed support for developing country members concerned about losing out on tax revenues, as well as a review clause.

Business leaders say an extension is vital to guarantee predictability, fearing duties could otherwise be introduced. It is also seen as key to securing U.S. support for the global trade body.

"If the moratorium does not get extended, the U.S. will use it as an excuse to beat the WTO on the head," a senior diplomat said.