Brittan beavers away to meet Gatt deadline

SIR LEON BRITTAN, the European Union's principal trade negotiator, will fly to Geneva today to try to resolve a series of mini- crises undermining the Gatt trade talks and strongarm the warring factions into agreeing a historic free-trade deal in time for Wednesday's deadline.

Washington's hard line on several key dossiers, notably maritime and financial services, has angered the other 115 countries which are party to the final accord, undermining the negotiating schedule.

Those in Geneva are aware they are discussing only a partial package because there are still outstanding issues between Washington and Brussels to be tidied up and fed back to them for comment. The temptation is not to compromise until the last possible moment in the hope of extracting last-minute concessions. In Brussels, where foreign ministers have still not given their formal approval for all the elements of a bilateral EU-US deal that is the basis of the Geneva talks, many countries are taking advantage of the hiatus to press their European partners for new funds in compensation for things given away in the Gatt.

A more serious argument between France and Germany as to whether or not a Gatt deal implies the need to strengthen the European Union's own trade arsenal against Washington's powerful trade-sanction legislation was set to dominate the dinner debate and spill over into summit business today, although the Belgian presidency has worked hard to keep such sensitive issues off the general agenda. Its resolution will depend on the kind of trade-offs France and Germany can decide between them, especially in the area of agriculture, when the whole issue of internal compensation is discussed by foreign ministers on Monday.

Over the weekend in Geneva, Sir Leon will meet the Big Four trading blocs known as the Quad - the EU, US, Japan and Canada (representing the Cairns Group) - to try and bash a few heads together. Washington's hard ball tactics on financial services are believed to be partly intended to extract a better deal from Japan.

The chief US negotiator, John Schmidt, said yesterday that the US and EU - which have to agree between themselves on most issues to clear the way for a global accord - had made no progress on what he described as a more serious problem over audio-visual products. This covers the sensitive area of cinema and television productions, in which some EU members - with France in the lead - insist that they must retain the right to 'cultural protection' and restrictions on American and other outside imports.

Other problems that could threaten a deal were focused on the lucrative and fast-growing area of services - which some estimates put at one-third of world trade - and in the shaping of new rules against dumping.

Only parts of the package will have been negotiated by tomorrow, the day the Gatt Director- General, Peter Sutherland, had planned to have all the texts ready. Sir Leon hopes, however, to make enough progress over the weekend to persuade foreign ministers in Brussels on Monday to settle their differences and approve the US- EC deal - increasing pressure in Geneva for the other parties to put their names to an overall accord.