Quiet Balladur may tone down trade objections

EDOUARD Balladur, the French Prime Minister, declined to comment on progress in the Gatt talks yesterday, perhaps reflecting the unease he feels at inheriting an intransigent position from his Socialist predecessors.

Officials at the Hotel Matignon, the Prime Minister's office, said there would be no reaction to progress on the General Agreement on Tariffs and Trade talks in Brussels on agriculture while negotiations were still in progress.

With Volvo's decision to abandon its merger with Renault making more news than the Gatt issue, a rare comment came from Jean Puech, the Agriculture Minister, who said the US proposals so far were 'insufficient', although he conceded there had been movement.

Even this reaction was remarkably meek given the threats of veto, a world-trade crisis and a European rift that have peppered the Gatt debate in France over the months. Francois Mitterrand, the Socialist President, gave a clue to the latest official position when he said, during a visit to Switzerland yesterday, that he believed there had been real progress. 'The latest indications . . . seemed to me more optimistic,' he said.

When Mr Balladur, a Gaullist, took office last March, after the right won National Assembly elections, his conservative coalition (the Gaullist RPR) and the centre-right Union for French Democracy (UDF) found themselves committed to supporting the previous Socialist government's rejection of the Blair House compromise on agriculture negotiated in Washington in 1992.

Faced with farmers' militancy, the government of the late Pierre Beregovoy had rejected the accord negotiated by the European Commission and tried, and failed, to gain a cross-party approval of its stance in parliament. Although the right, blaming the Socialists for accepting reform of the Common Agricultural Policy the previous May before concluding Gatt, refused to add its votes to the left's, it nevertheless adopted the same stance so as not to anger the farming lobby.

Since last March, with Jacques Chirac, the RPR president and a former agriculture minister, supporting the farmers' cause wholeheartedly, the right has been quietly divided over how to approach Gatt.

The UDF began to murmur the advantages of agreement and the dangers of isolation after the summer. UDF ministers, such as Gerard Longuet, the Industry and Foreign Trade Minister, whose brief covers Gatt, was notably less hostile to compromise in public than Alain Juppe, the Gaullist Foreign Minister.

Mr Puech, also a member of the UDF, tempered his lukewarm remarks on the Brussels talks yesterday by saying that the French and European economies had everything to gain from a good agreement.

Last weekend Valery Giscard d'Estaing, the former president, and Raymond Barre, the former centrist prime minister, both spoke up in favour of concluding the Uruguay Round to boost French trade and save France from international condemnation.

Mr Balladur, presumably to maintain a tough negotiating stance, has been downbeat in his comments, particularly in remarks to parliament on Wednesday, but his private position has been much softer, according to French sources. Officials have described his desire to conclude a Gatt agreement as close to an obsession. Talks are said to be under way with farming unions to calm their Gatt fears.