US does not budge on Gatt talks

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The Independent Online
BRUSSELS - Trade talks between the United States and the European Community have made no further progress on agriculture, leaving a global pact hanging on the edge, writes Andrew Marshall.

Sir Leon Brittan, the EC's external trade commissioner, said that concessions on farm subsidies had not materialised after a day of talks with his counterpart, Mickey Kantor, US Trade Representative, in Brussels. 'We've not made any progress in that respect,' said Sir Leon yesterday.

Mr Kantor rejected a French idea that a partial deal on the General Agreement on Tariffs and Trade - leaving out sensitive areas like agriculture - might be reached by December. 'That suggestion would not be helpful,' he said. Sir Leon agreed.

Elaborate games are being played as the 15 December Gatt deadline approaches. France wants further concessions from the US, and rejects a US-EC farm trade deal struck last year. But the US and the European Commission say the Blair House accord cannot be renegotiated. Instead, France's EC partners say parts could be 'reinterpreted'. The US rejects this.

European officials think the US will stall until nearer the deadline. There is unlikely to be US concessions over agriculture until later in the talks, diplomats in Brussels say.

A key factor in the complex process leading up to a solution will be the Franco-German relationship. Germany does not believe that there can be a deal without France, which implies concessions to Paris. However, senior European officials say Germany believes that the relationship between Paris and Bonn would be badly damaged if the talks fail. This would hit a vital German interest - the welfare of its industry and commerce. The same message was given to France yesterday by Helmut Kohl, the German chancellor, in a speech in Paris.

The negotiators have approached 'crisis' point three times in their seven-year attempt to reach a deal. But both the US and the EC seem to accept that without agreement this year, another try would be almost impossible.

Diplomats in Brussels warn that a collapse could mean the disintegration of not just US-EC trade relations, but the weakening of the EC's internal market. It would trigger a political crisis from the which the EC may not recover.