US urges deal on Gatt talks

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MUNICH - As concern mounts over the waning world recovery, the United States yesterday pressed for a last-ditch attempt to break the deadlock in world trade talks, writes Peter Torday.

Officials in the Group of Seven industrialised nations believed this could do more than anything to promote an upswing in world business confidence. James Baker, the US Secretary of State, is understood to be seeking 'substantive' talks on General Agreement on Tariffs and Trade (Gatt) with Frans Andriessen, the chief European Community trade negotiator who will attend the G7 summit that opens today.

The four-and-a-half-year Gatt talks aim to liberalise trade in goods, services, foreign investment and farm produce. But they have broken down, perhaps irretrievably, after a US-EC dispute over subsidies for agricultural trade.

US worries about planned cuts in EC subsidy support for farm exports proposed in the EC farm reform package, and French resistance to further reductions, were expected to dominate a dinner for George Bush and Francois Mitterrand last night. The US President faces protectionist pressures during his election campaign, while the French President wants to do nothing to upset a September referendum on the Maastricht treaty. Germany's Chancellor, Helmut Kohl, who hosts the three-day summit, is keen to break the impasse on Gatt, a goal apparently shared by all participants except France.