The CBI at Harrogate: Trade / 'No more chances' on Gatt: Michael Harrison and Mary Fagan round up developments at yesterday's conference

Michael Harrison and Mary Fagan round up developments at yesterday's conference THE WORLD trading system will suffer 'irreparable damage', condemning future generations to a lower standard of living, unless political leaders find the will and courage to reach an accord on the General Agreement on Tariffs and Trade by next month's final deadline, Peter Sutherland, director- general of Gatt, said yesterday.

In an uncompromising and blunt message to the US and Europe, which remain at loggerheads over key aspects of the agreement, Mr Sutherland said there was no way the 15 December deadline could, should or would be extended.

Addressing the CBI's annual national conference in Harrogate, Mr Sutherland said: 'No further chances are going to be offered negotiators and world leaders this time; the political and legal chemistry allows for no more extensions.

'Whether it is now comfortable or convenient for ministers in many capitals to take the necessary final decisions is beside the point. They have no choice but to make those decisions.

'And if in doing so they play for short-term political safety rather than a long-term vision of a better world, then their children and future generations will rightly condemn them to the historical backwater of failed leadership which they will richly deserve.'

Mr Sutherland went on to reject suggestions that a Gatt agreement could be reached with contentious issues such as agriculture, textiles and market access left for further discussion. That 'zero sum game' was not a recipe for completing Gatt. A successful conclusion to the Gatt round could provide a boost to world trade estimated at pounds 200bn, but the price of failure would also be stark. Speaking earlier, Mr Sutherland said: 'We cannot go on with a game of chicken between the US and the European Community. There has to be some movement in their positions.'

Progress was being made constantly in the negotiations, but big obstacles remained that could only be overcome through political leadership, he said.

Although CBI members have identified completion of the Gatt round as Europe's top priority in the coming months, conference delegates voiced reservations about a deal at any price. John Harrison of the British Knitting and Clothing Federation warned against a Gatt agreement that led to a renewed avalanche of imports. 'I have a nightmare that the Gatt deal will collapse and a nightmare that any deal will be seen as no deal at all,' he said.

His members were in danger of losing the multi-fibre arrangement that had underpinned the industry without any quid pro quo, he said. Most European textile tariffs were less than 14 per cent, and none was more than 17 per cent, he added. In comparison, tariffs in the US were 40 per cent, in Australia up to 60 per cent, and in some Far Eastern nations more than 100 per cent.

David Evans, director-general of the National Farmers Union, also sounded a note of caution. He said Britain could suffer in a post-Gatt world, because other European governments would seek ways of sustaining small agricultural producers by putting money back into the sector. He said the effect would be to save inefficient producers at the expense of many jobs throughout the food chain in the UK.

According to Raymond Douglas of British Steel, the imperative in Gatt was to ensure that free trade was fair trade. 'We are looking for open markets, elimination of subsidies and access to markets,' he said. He warned that without fairness, Britain was opening up its boundaries to those who relied on governments for subsidies.

Mr Douglas attacked continued subsidies in Europe disguised as state aid. Their effect was not only to damage efficient firms but to damage the European Union's bargaining power in the Gatt arena.

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