By Emma Farge

GENEVA (Reuters) -The head of the World Trade Organization on Thursday expressed optimism about clinching a long-awaited deal to stop overfishing, but some developing states criticized the draft agreement and India called parts of it “unjust.”

The virtual conference in Geneva – the first meeting of WTO trade ministers since 2017 – is hoping to wrap up 20 years of talks and set out rules to curb harmful subsidies that lead to overfishing.

The global trade body has not reached a multilateral deal in years and Director-General Ngozi Okonjo-Iweala, who took office in March, said at the start of the conference that it would be a “litmus test” of the WTO’s ability to do so.

“I believe that we are all genuinely committed, but a shift of mindset is necessary for us to bridge the final gaps that continue to separate members,” she said at the WTO headquarters in Geneva.

The eight-page draft deal lists a range of subsidy bans, with some conditions for exemptions for poorer countries that are yet to be finalized by negotiators.

But several ministers expressed reservations – pointing to a gulf between wealthier countries and some developing states that want to build up their fleets with the help of subsidies.

“Clearly, it will lead to capacity constraints for developing countries, while advanced nations will continue to grant subsidies,” Indian trade minister Piyush Goyal said on one part of the text. “This is unequal, unfair, unjust.”

Pakistan described the draft as “regressive and unbalanced.” The African group, seen by many as losing out from subsidies which allow big industrial fleets to compete in its waters, said that “significant gaps on core issues” remained.

One delegate from a wealthy country described some of the criticisms as “obstructionist.” “The major fault line is still special and differential treatment,” they told Reuters, asking not to be named.

Several delegates said India’s strong stance might be about seeking a trade-off in separate WTO negotiations on a patent waiver for COVID-19 drugs which some wealthy countries oppose.

U.S. Trade Representative Katherine Tai said the draft had “significant shortcomings.” “WTO members must ask whether the current negotiating text reflects the best we can do after 20 years,” she said.

China – the top subsidizer accounting for about 21% of the $35.4 billion in handouts globally according to a 2019 study  – appeared to offer one key concession.

In a hint that China might forego at least some exemptions for itself, Commerce minister Wang Wentao said that they should be “mainly provided for poor and vulnerable artisanal fishers” in developing and least developed countries.

The European Union was upbeat, saying the draft formed the basis of a potential agreement.

Negotiators got close to a deal at the last WTO ministerial conference in 2017 but the talks collapsed, with some observers blaming developing countries who sought big exemptions.

Any deal needs all 164 parties to approve it by consensus.

(Additional reporting by Philip Blenkinsop in Brussels; Editing by Kevin Liffey and Andrew Heavens)