EU trade offer draws fire

The European Union's new offer to cut farm tariffs provides a solution for world trade talks, Europe's trade chief said yesterday, but the proposal failed to impress the bloc's international trading partners.

Australia joined the United States and Brazil in demanding more concessions, while Africans said the offer fell short of what was needed to break a deadlock in the negotiations.

European Trade Commissioner Peter Mandelson said Friday's EU offer went much further than the bloc had previously been willing to go. Australian Trade Minister Mark Vaile said the EU's offer to cut its average tariff on agricultural imports by almost half to just over 12 per cent was well below the demands of the United States, Australia, Brazil and other big food producers.

They want average cuts by the EU of at least 54 per cent, and rejected a previous offer they said meant average cuts of under 25 per cent. But Vaile told Reuters in an interview yesterday he still hoped a new world trade deal could be reached.

Vaile still hoped the Doha Round of trade talks would go ahead at a meeting of the WTO's 148 members in Hong Kong in December, when members hope to agree on a blueprint for a global trade deal. He said he expected the EU to show it was truly committed to lifting struggling African economies by removing bad trade practices and farm subsidies that hurt the continent.

The EU's executive Commission has been caught between demands for more concessions by big trading partners and French opposition to weakening protection for farmers.

French President Jacques Chirac said on Thursday Paris might veto the deal if Brussels went any further.

Mandelson said in his article the trade talks also had to focus on non-farm issues, such as trade in industrial goods and services.

Mandelson said the tariff cuts advocated by the US would have disastrous consequences for developing countries whose preferential access to European markets would effectively be eliminated.

Vaile said negotiations would continue to close the gap with the US proposal for average tariff cuts of 75 per cent. Much would depend on a video conference between ministers from Europe, US, Brazil, India and Australia next week.