Gatt duo burn midnight oil in search of deal

(First Edition)

EUROPE and the United States were locked in negotiations last night as the world's two largest trading blocs wrestled to draw up a draft Gatt agreement liberalising trade.

So severe were the outstanding problems that the US special representative, Mickey Kantor, and his European counterpart Sir Leon Brittan worked through the night to try to find solutions. European foreign ministers, who were to have discussed a draft accord yesterday, must wait until today, setting back the entire timetable.

Nor will these discussions be easy. France yesterday contested the only tangible sign of progress so far, a new deal on agriculture, saying it still did not go far enough. Paris threatened to complete the debate by tabling will a fresh list of unrelated demands.

The French Foreign Minister, Alain Juppe, said he could not accept what he had heard so far of a US-EU trade deal. 'What I know is not acceptable,' Mr Juppe said. 'I see no reason for there to be a trade deal - on the contrary.'

However, on the basis of the details released yesterday, the reworked agricultural deal many of France's original complaints. The agreed limits in subsidised exports are to phased in over time, enabling the European Union to unload much of its unwanted grain mountain cheaply on to the world market and to delay the effect of any cuts - a key French demand. Yet French officials yesterday persisted in talking it down. 'There is no evidence of an agreement on agriculture or on other sectors as long as the Council (of foreign ministers) has pronounced on it,' a French Foreign Ministry spokesman said, signalling that Paris intended to take its European partners right down to the wire before it will sign any Gatt blueprint.

With the political stakes mounting as the December 15 deadline looms, all countries are engaged in trying to extract the greatest commercial gain at the lowest political cost. The US Special Trade Representative, Mickey Kantor, and his European counterpart, Sir Leon Brittan, worked all day to try to resolve persistent problems. While there has been some progress on opening up the steel market, liberalising the audiovisual sector is still problematic, as is the establishment of an organisation to rule on international trade disputes.

Meanwhile, European foreign ministers, while waiting for Mr Kantor and Sir Leon to report back, began arguing among themselves. Parallel to the US/EU Gatt negotiations are a series of separate battles waged by individual EU member states against their European partners in the hope of wresting internal concessions to compensate for anything they may have to negotiate away in the greater interest of a global Gatt day.

Thus, while everyone is aware there must be a Gatt deal on textiles, Portugal was yesterday trying to secure guarantees that the European Union would pay the price for such an accord by compensating Portuguese textile workers for the inevitable loss of competitivity.

'Everyone has stressed that there can be no deal until there is a deal on everything, what we are now seeing is the unravelling of a series of highly complex and interlinked negotiating positions,' explained a European diplomat yesterday.

In Geneva, the representatives of the other 114 countries which are party to the General Agreement on Tariffs and Trade sat waiting, aware that unless the negotiations in Brussels produced a draft accord, there was no likelihood of being able to pull off the deal that has been seven years in the making.