Major is hopeful of progress on Gatt

JOHN MAJOR said yesterday he hoped the new EC agreement modifying farm policy would enable the Community to progress in the General Agreement on Tariffs and Trade (Gatt) talks on world trade.

Speaking after separate meetings with Edouard Balladur, France's new Gaullist Prime Minister, and President Francois Mitterrand, Mr Major said at a press conference that it was illogical to give development aid to the Third World and not progress towards an agreement at the Gatt talks which would open up Western markets to developing countries' goods.

Speaking publicly for the first time since he sacked Norman Lamont as Chancellor of the Exchequer, he said Britain did not intend to rejoin the Exchange Rate Mechanism which it left last September. 'Circumstances for re-entering don't exist,' he said.

Mr Major said his talks with the French leaders had covered a whole range of European and international questions in advance of the Copenhagen EC summit, the Group of Seven meeting in Tokyo and a bilateral summit in London which he said had been set for 26 July. He said that both Mr Balladur and the Socialist President would travel to London for the meeting, in keeping with the conventions of France's left-right 'cohabitation' which began with the conservative victory in France's parliamentary elections two months ago.

Mr Major said that on Bosnia, Britain and France had an 'astonishingly close' analysis and level of commitment. France, with some 5,000 troops in former Yugoslavia, and Britain, with about half that number, have the biggest contingents in the UN Protection Force there.

Replying to criticism that last weekend's Washington agreement on Bosnia was too conciliatory to the Serbs, Mr Major said: 'We will maintain sanctions, we will maintain diplomatic pressure and we will not accept the land gains by force.'

In Brussels this week, EC farm ministers agreed to a French request to increase compensation for farmers who have to allow land to lie fallow under last year's reform of the Common Agricultural Policy. Mr Balladur said he was 'happy with what was signed in Brussels and we shall see the consequences' in Gatt. The EC concessions were seen as an essential precursor to Paris accepting a Gatt farm accord negotiated last November.

EC keeps cool, page 19