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EU and US attempt to break trade deadlock

Philip Thornton,Economics Correspondent
Monday 08 January 2007 20:31 EST
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The rise of protectionism is a key danger to the world economy this year, the head of the European Central Bank said yesterday as leaders of the EU and US met in Washington to find a way to restart the global trade talks.

Jean-Claude Trichet condemned the trend to more protectionism in trade and foreign investment that emerged in both economic blocs last year.

His comments came as George Bush and José Manual Barroso, the presidents of the US and the European Commission, held talks to find a breakthrough in the trade negotiations that collapsed in July over farm subsidies after five years of talks.

President Bush said the best way to help impoverished nations was to complete the Doha round of talks, named after the Qatar capital where they were launched in November 2001.

After the two-hour meeting Mr Barroso said the two sides were at a "defining moment" for the negotiations and it was critical to complete them soon.

Peter Mandelson, the EU trade commissioner, and Susan Schwab, the US Trade Representative, were also holding talks yesterday.

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