'Last chance' to end Gatt battle

PRESIDENT BUSH'S need for an election campaign boost offers the world a last chance to resolve a six-year trade battle and unlock an estimated dollars 190bn (pounds 111bn) of business, Tristan Garel-Jones, Britain's Foreign Office minister responsible for Europe, predicted yesterday.

The German Finance Minister, Jurgen Molleman, warned that if this 'moment of truth' were missed, commercial chaos would result as countries put up protectionist barriers to guarantee their own markets. He said it was disappointing that 'in the midst of this economic crisis we are incapable of giving a signal that could relaunch our economies'.

The EC is pitched against its commercial partners, principally the US, in the fight to agree mutually acceptable trading rules under the General Agreement on Tariffs and Trade (Gatt), which for the first time would cover previously unlegislated areas such as trade in intellectual property.

The talks are deadlocked on a number of matters, but agriculture is the principal stumbling block and a deal here could dynamite the logjam. The US complains of unfair subsidies to EC farmers; the Community points to its recent internal farm reforms as evidence it has already compromised.

The two have a last chance to solve this dispute when the US trade representative, Carla Hills, and the US Agriculture Secretary, Edward Madigan, fly to Brussels at the weekend. President Bush would like a Gatt agreement before the US elections, presumably to boost his popular standing. 'I don't think that if that prize is offered we should let it slip from our grasp,' said Mr Garel-Jones.

His optimism is not shared by all. In particular, France, whose large and influential agricultural regions voted 'no' in the referendum on Maastricht, is more reluctant than its EC colleagues to concede further ground.

The French minister for external trade, Dominque Strauss-Kahn, denied they were alone in their resistance, suggesting that many countries felt the same but preferred to hide behind the French position. Mr Mollemann argued that with the referendum now over, it should be possible for the EC, negotiating on the part of the Twelve, to take 'greater risks' at the weekend.