Mandelson rounds on 'fake' US food aid

The opening day of the high-profile trade summit in Hong Kong got off to a disastrous start yesterday. A bitter war of words broke out between Europe, the US and the United Nations, and demonstrators wrought havoc inside and outside the convention centre.

Peter Mandelson, the EU's trade chief, triggered a row when he branded the US food aid programme, which delivers American produce to needy countries, as "fake" aid designed to help US farmers rather than the world's poor.

He rejected demands by his US counterpart that it was up to Europe to break the deadlock in the stalled World Trade Organisation negotiations. "He does not have an export subsidy fund so it is very generous of him to make that commitment," Mr Mandelson told delegates from developing countries. "He does have a large amount of fake food aid so if he were to give a commitment to deal with his fake food aid that would a more interesting proposal."

He went on: "The large, structured US programme of 'in kind' food aid is designed in reality to give support to US agricultural producers. It distorts trade and depresses local production.

"Statistics show that this aid is directly related to the price shifts for the commodities concerned on the US market."

Rob Portman, the US trade representative, said Mr Mandelson was clearly "obsessed" with food aid and his spokeswoman said the US had an export subsidy programme for cotton which it was committed to eliminate. "We have put forward a proposal to tighten food aid to ensure it meets criteria so that commercial displacement does not occur," she added.

The row threatened to escalate after Mr Mandelson attacked the World Food Programme, a UN agency, for taking newspaper advertisements accusing trade ministers of "taking food from children's mouths".

The opening ceremony was disrupted by 40 protesters holding signs with the words in many languages: "Stand by your people" and the "WTO Kills Peasants". Outside the giant exhibition centre at least nine people were injured as anti-globalisation protesters scuffled with riot police.