France ready to veto Gatt deal

THE French Prime Minister, Pierre Beregovoy, has warned European Community partners that France is prepared to veto the vexed agricultural compromise agreed last November in the General Agreement on Tariffs and Trade (Gatt) talks with the United States.

And in another development yesterday, Mr Beregovoy called for Gatt talks to start again from scratch. He told an election rally: 'The Gatt negotiations must start again from scratch with a firm European position. When I say from scratch, I mean putting everything on the table - some things have already been achieved - and then we must hold fast.' Mr Beregovoy added: 'It is time for Europe to send a warning to the world, to the US in particular, on aerospace, agriculture and steel.'

Letters from Mr Beregovoy, to Jacques Delors, the President of the European Commission, and Denmark, the current EC president, said France would use the 'Luxembourg Compromise' to scuttle the specific agreement on oilseeds if it is examined, as planned, at a regular foreign ministers' council on 8 March.

The Commission has expressed the view that the oilseeds agreement can be dealt with separately from the rest of the Gatt agreement, a view France rejects. The texts of Mr Beregovoy's letters, which were delivered on Friday, were made public by his office yesterday.

Mr Beregovoy told Mr Delors that France wanted the issue taken off the 8 March agenda to await the completion of a study to determine whether the Gatt compromise - concluded in the face of US threats to impose prohibitive taxes on some EC produce - was compatible with the EC's Common Agricultural Policy (CAP), given the 'very important interests' of France. The 1965 Luxembourg Compromise allows any EC member to veto any decision it believes imperils its fundamental interests.

The publication of the letters came as farmers from Rural Co-ordination, a militant organisation, blocked railway lines throughout France yesterday morning, causing delays and cancellations for several hours, particularly in central and south-west France.

Philippe Arnaud, the movement's secretary-general, said the tactic was a precursor of the more 'efficient' demonstrations planned for the future as opposed to the traditional roadblocks and demonstrations. Since its foundation in late 1991, Rural Co-ordination has hinted that it intends to extend its range of protests to communications and economic targets. French farmers are opposed both to the Gatt compromise and to last year's CAP reform.

Although Mr Beregovoy's determination to stand firm is certain to be backed by the conservative opposition parties, it could be seen as a reminder to France's EC partners that, with parliamentary elections next month, Paris has no room for manoeuvre, hence the suggestion that the issue be removed from the agenda.

The Socialist Party of President Francois Mitterrand looks certain to go down to humiliating defeat in the elections. Mr Mitterrand will still have two years of his presidential term to serve, however, heralding a second bout of left-right cohabitation, with a conservative government running day-to-day national affairs.