EU urges US to revive global trade talks

The European Union and United States will hold high-level talks in Washington today in a last-ditch attempt to restart the stalled world trade talks.

Peter Mandelson, the EU's trade commissionerwill meet with meet his US counterpart, Susan Schwab, after talks between President George W Bush and the European Commission President Jose Barroso.

News of the talks came as Beijing sought to head off the threat of trade war between the two economic superpowers in advance of figures showing a record trade deficit between the US and China.

Mr Mandelson said that the EU and US needed to "reinvigorate" the talks whichcollapsed last July after five years of negotiations over rich countries' agricultural subsidies.

President Bush has just five months until his authority to present a trade deal to Congress for approval - but not for amendments - runs out.

Speaking before the meeting, Mr Mandelson said: "The quiet, constructive bilateral contacts of the past few months have made clear to us all the possible outline of a final deal. We need the added momentum of political leadership from the highest level. Europe and the US have a shared responsibility to make this happen."

The talks could be overshadowed by figures this week that could showing China's trade surplus surged 74 per cent in 2006 to a record $177.3bn (£91.9bn).

The figures will put pressure on Beijing to let the renminbi strengthen to ease tension with the US over exports or face the risk of a Congressional backlash.

Yesterday Zhou Xiaochuan, the Governor of the People's Bank of China, gave a hint of movement in that direction, indicating the currency would rise in line with the trade surplus. "If the trend is continued in this way, I think the renminbi flexibility will be expanded," he said.