Blair calls on rich nations to end deadlock on trade

Tony Blair has tried to break the deadlock over a world trade agreement by calling on rich nations to set a date for ending their export subsidies.

The Prime Minister used his annual foreign affairs speech to appeal to France and the United States not to let their desire to protect their own farmers scupper a chance to seal a historic agreement on global trade that would allow millions of people in the poorest countries to escape poverty.

Admitting that World Trade Organisation (WTO) negotiations were "stalled ", he issued a detailed list of proposals aimed at reviving the process ahead of a critical meeting in Hong Kong next month.

Speaking at the Lord Mayor's Banquet in London last night, Mr Blair called for "a comprehensive, ambitious agreement" to cut barriers to trade in agriculture, non-agricultural market access and services by the end of 2006.

He said: "The European Union and the US must go further, within the negotiations, on agriculture. We must reduce trade distorting subsidies; we must see a credible end date for export subsidies; we must put an ambitious limit on the number of sensitive products that can be afforded extra protection.

"In return Brazil, India and others must move on cuts in industrial tariffs, services liberalisation, with proper flexibility for developing countries that need to sequence their commitments in line with their development needs."

Although both France and America may resist the proposals, Mr Blair increased the pressure on them to make concessions.

He said: "Agriculture accounts for under 2 per cent of the GDP of rich countries and roughly the same share of employment. Can we afford to allow differences over support for agriculture in rich countries to block an agreement that could give renewed hope to the 1 in 5 people in the world living on less than $1 a day? And can we afford to weaken an international trading system on which future employment and prosperity in rich countries depends?"

The Prime Minister said that a one per cent increase in Africa's share of world trade would benefit Africa by over $70bn (£40.2bn), three times the aid increase agreed at the G8 summit at Gleneagles in July.

He conceded that, as France argues, Africa could lose out in the short term if the proposed deal removed the preferential trade agreements with the EU. But he argued that in the long run, poor countries "stand to gain if we are bold, confident and ambitious".

Mr Blair warned rich nations that they would enjoy "no security or prosperity at home" unless they "deal with the global challenges of conflict, terrorism, climate change and poverty."

His speech came as a report by Oxfam warned that Mr Blair's campaign to alleviate Africa's problems was doomed to failure.Phil Bloomer, a spokesman for Oxfam, said: "Tony Blair wanted this to be a year for Africa, but what's on the table now, if agreed in Hong Kong, would actually make the continent worse off."