Hewitt sparks CAP rift before WTO meeting

Failure to make serious progress at next week's high profile trade negotiations in the Mexican resort of Cancun would be "disastrous" for the world's "fragile" economy, Patricia Hewitt warned yesterday.

The Trade and Industry Secretary said the meetings of the World Trade Organisation must deliver reforms to help reduce poverty in the world's richest countries and her warning was echoed by Pascal Lamy, the European Trade Commissioner.

However, there were signs of a split between the UK and continental Europe over the issue of cutting farm subsidies.

In a briefing before the start of next Tuesday's talks, Ms Hewitt said: "If we were to fail - and I don't believe we will - it would be disastrous for the world economy." She said failure would also undermine attempts for a multinational coalition against terrorism.

At a separate briefing M. Lamy said: "A bad result in Cancun will be bad news for the world economy."

However, there were signs of a rift over the common agricultural policy as Ms Hewitt more cuts were needed to the reforms which were recently decided on.

She also hinted the UK would not push for a deal on new rules on foreign investment - something developing countries want taken out of the negotiations.

"Everybody knows that developing countries are in desperate need of more foreign investment but investment [rules] are not a priority for the UK," she said.