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EU trade boss denies split

The EU's top trade negotiator said yesterday that he sees a "very strong commitment" from European governments for progress in world trade talks in December.

EU Trade Commissioner Peter Mandelson warned that talks didn't rely only on a breakthrough on agricultural subsidies, as progress was also needed on industrial goods and services.

He denied that European member states were split on his mandate to negotiate a trade deal on their behalf -- despite France calling an emergency meeting of foreign ministers to ensure that the EU head office was not making excessive concessions that could hurt its farmers.

Mandelson warned that a French demand to analyze all the effects of any new trade offer on farming -- if taken literally -- would bring the talks to a halt.

The talks at the WTO to revamp global trade flows need to progress later this week to make the deadline for a framework agreement at a meeting in Hong Kong in December.

Mandelson told EU governments earlier yesterday not to panic over world trade talks, saying that they would be making a "terrible mistake" if they soften Europe's stance on farm and other subsidies now.

"Surely it would be the wrong reaction, and a terrible mistake for the EU, at the first sign of serious movement in the talks -- movement that we have been calling for -- to lose confidence and pull in our horns," Mandelson told ministers.

Mandelson tried to allay fears that the EU's latest offer to cut farm subsidies would force Europe to reform its agriculture policy, saying this was "absolutely and unequivocally not the intention."

France, which has an important agricultural lobby and has always come out in defense of farm subsidies, called the meeting as poorer countries call on the US and the EU to make substantial cuts in what they actually dole out to farmers.

US Trade Representative Rob Portman warned that the WTO talks could collapse unless European governments backed Mandelson and EU Farm Commissioner Mariann Fischer Boel.

He said the EU had to cut tariffs for agricultural products for the talks to move forward. "Unless and until we do that, the talks cannot proceed."

The EU said last week it would reduce the number of sensitive products that have higher import tariffs -- such as beef and poultry -- an offer Portman said did not match expectations on market access.

Portman claimed US farmers needed more access to European markets to cushion the blow of cuts in farm support announced last week. "There is a lot of responsibility right now that rests on the EU to do the right thing," he said.

Mandelson also said last week the EU was ready to cut "trade-distorting" agricultural support by 70 percent, provided others made similar efforts.

French ministers angrily claimed that Mandelson had moved outside the mandate agreed to with the EU's member states.

He rejected the criticism, saying the latest offer was "exploratory," and stressing that Europe had the most to gain from a deal on better market access for services and industrial goods, which make up 85 percent of European exports.
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