Blair 'optimistic' of world trade deal breakthrough

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The Independent Online

Tony Blair yesterday gave a strong hint that the economic superpowers are on the brink of an agreement to restart the stalled talks on a new deal on world trade, indicating that he saw it as part of his legacy.

The Prime Minister told the CBI's annual conference that he would be holding talks with other major European powers as well as politicians from the United States and Brazil in the next few weeks, and that he was "relatively optimistic".

Mr Blair said a deal would see deeper cuts in the European Common Agricultural Policy, sharper cuts in US farm subsidies, and greater access to industrial goods markets in emerging economies such as India, China and Brazil.

"I think there is a deal that can be done," he said, adding: "That will be a priority of mine over the next couple of months or so."

His comments are expected to be reinforced by Gordon Brown, the Chancellor, and Henry Paulson, his US counterpart, when they give a joint address to the CBI this morning.

The negotiations were launched five years ago to eliminate trade-distorting farm subsidies in the West and open up markets to poor nations, while giving Western firms better access to emerging economies.

However, talks ground to halt in July after a disagreement over the scale of cuts to farm subsidies.

Mr Blair said: "Even if only the offers that are now on the table were agreed it would have an impact that would be twice as great as the last round [in 1993]. There's a negotiation that can be done. It's like a Rubic's Cube - you have to fit the whole thing together."

But the Friends of the Earth's trade campaigner, Joe Zacune, said the proposals would also open up developing country sectors such as forestry and fisheries, threatening the natural resources that millions of people depend upon.

Yesterday Peter Mandelson, the EU Trade Commissioner, said the EU had proposed ministers meet before the end of the year.

Meanwhile, Sir John Sunderland used his opening speech to the conference as CBI president to attack the "staggering hypocrisy" of European governments that preached free trade while erecting barriers to foreign companies. He said that "selfish" protectionist action hit job creation and investment and stopped developing countries becoming more successful.

He accused France, Spain and even the US of trying to stop foreign takeovers of companies in their countries. "It seems clear that protectionism is an insidious parasite in the so-called free trade ecosystems of many developed countries," Sir John added.