A deal to cut the red tape that clogs up international trade will provide a $1tn (£634bn) boost to the global economy if it can be agreed by the end of the year, the director general of the World Trade Organisation has said.

Speaking in Davos on Friday, Pascal Lamy said there was a good chance that the most important part of the stalled Doha trade negotiations would be resolved when trade ministers met in Bali in December.

Lamy said there was no chance of an immediate conclusion to the whole round, a complex set of negotiations that includes 20 separate aspects of trade, including manufacturing tariffs, agriculture, services and the rules governing the import and export of goods and services. Talks have been under way since late 2001 and, despite hopes that the re-election of Barack Obama as US president would smooth the way to a comprehensive deal, Lamy was downbeat about the prospects.