Chancellor attacks Mandelson over world trade talks

The Chancellor launched a veiled attack on his old political sparring partner Peter Mandelson yesterday over the way the European trade commissioner has handled talks aimed at breaking the impasse on a new international trade agreement.

Speaking at the World Economic Forum in Davos Switzerland, Gordon Brown said Europe had done well on debt relief over the past year, but "we haven't done well on trade at all". Although he did not refer to Mr Mandelson in person, his remarks are bound to be seen as an outburst directed at him.

Mr Mandelson seemed to adopt an uncompromising stance on the talks this week by suggesting Europe could walk away from the negotiating table without losing anything. But Mr Brown insisted "Europe and the US will have to make more concessions to get the talks off the ground". He said: "We have got to put the case for open and free trade because protectionism is rising as a sentiment. It is a natural response to global economic change, yet there is a stronger case now than ever for breaking down many of the arguments that exist between America and Europe."

The move will be seen as an attempt by Mr Brown to force a last-minute breakthrough in the stalled trade talks and embarrass Mr Mandelson. The talks have been stuck since October, when poorer countries such as India and Brazil rejected an offer by the EU to lower tariffs and reduce farm subsidies as too little, too late.

A summit of all 149 members of the World Trade Organisation in Hong Kong last month averted a total failure in the four-year-old talks, but ministers insisted they had just four months to strike a deal to prevent a total collapse that would trigger a global trade war.

The EU and US insist they have made generous offers to open up their markets and have repeatedly said they will not make any further moves until other countries make concessions.

But the EU has found itself increasingly isolated. The US has accused Brussels of offering too little, prompting Mr Mandelson to retaliate with an attack on the US Food Aid budget as a covert farm subsidy.

Mr Mandelson was forced to take this hard-line stance last year after France called an emergency meeting of all EU member states to get the him to state he would make no new offer that exceeded his mandate without permission from ministers.

The Treasury has frequently criticised France's intransigence but now appears to have become so frustrated with the dire state of talks that it is prepared to open up a public split with the Commission.

The talks were launched in November 2001 to try to show the world was still able to reach multilateral agreements even against the background of the September 11 attacks that year. The talks swiftly became bogged down over key issues. Major agricultural exporters such as Australia and Brazil demanded sharp cuts in government support for farmers in the US, EU and Japan as a condition for a deal.

At the same time rich countries called on middle-income nations to cut tariffs on manufactured goods. The poorest nations have threatened to pull out of the talks unless they get protection for their nascent industries.