France 'no longer isolated' on Gatt

FRANCE'S European Community partners last night appeared to pull back from sending it into isolation after its refusal to bow to US pressure in the Uruguay Round of international trade talks.

After a meeting in Paris between seven of the EC's 12 agriculture ministers, representatives of Germany, Denmark and Ireland came out insisting that France was no longer alone. Ignaz Kiechle, the German Agriculture Minister, insisted that France had 'never been isolated', while his Danish counterpart declared that it was 'not the policy of the EC' to allow it to stand alone.

The agriculture ministers of Italy and Spain were present at a meeting hosted by Jean-Pierre Soisson, the French Farm Minister. John Gummer, who as British Minister of Agriculture is currently chairman of the EC's Agriculture Council, was also present.

The combined voting weight of the seven ministers means that France is no longer likely to find itself outvoted in the EC's Council of Ministers when a Gatt deal provisionally negotiated by the European Commission is presented for the community's members to endorse.

The ministers' unexpected meeting came after a week in which France had made increasingly urgent demands that no early settlement should be made in two savage disputes with the US over the EC's farm subsidies. A wider trade deal between 108 countries signatory to the General Agreement on Tariffs and Trade (Gatt) has been delayed by American anger over subsidies paid by the EC to food exporters and to producers of soya beans and other oilseeds.

France, which is the Community's leading agricultural exporter and whose 1 million farmers are the angriest opponents of concessions to the United States, has insisted that no deal should be made with Washington that forces Europe into further cuts in its farm exports than have already been planned under the reform of the Community's Common Agricultural Policy.

European and American officials worked over the weekend to try to resolve the impasse, which threatened to deteriorate into a full-scale trade war after Carla Hills, the US Trade Representative, revealed on Friday that the Bush administration is preparing a dollars 1bn 'hit list' of European food exports, including French wine and Irish dairy products, which could be hit with punitive 100 per cent tariffs if the EC does not soften its position.

The EC farm ministers are due to meet again in Luxembourg this afternoon for a formal session of the EC's Agriculture Council, at which the impending trade war and the Gatt crisis will be the most important items under discussion.

They will be told that the member of the Commission responsible for agriculture, Ray MacSharry, may fly to New York on Wednesday to meet Ed Madigan, the US Secretary of Agriculture, in a last-ditch attempt to close the gaps that remain between the two sides.

Under the Community's voting rules, analysts say, international trade negotiations are to be decided by majority vote in the Council of Ministers. In fact, countries are allowed to exercise a veto if they declare that a 'vital national interest' is in peril.

Until last week, few EC diplomats or officials were willing to consider the case for ignoring a French attempt to veto Gatt progress. But it seems increasingly that the Community may be forced to choose between consigning the trade round to oblivion and risking a bitter internal row.

A compromise on Gatt could inject some dollars 200bn of new trade into the world economy, helping to lift industrial countries out of recession and adding a full percentage point to British economic growth every year for five years. If the US imposes sanctions and thus starts a tit-for-tat trade war, there is a danger that the world economy could be pushed from recession into slump.

The British government is anxious to use its presidency of the Community to avert such a trade war by putting greater pressure on the French government, which has been insisting that no deal can be struck before the US presidential election on 3 November.

But Mr Gummer himself has a great deal of sympathy with the French position. At a public meeting in Brussels on 14 October, he warned that France should 'not be pushed' into a deal it does not want. 'I'm entirely in favour of achieving a solution' to the Gatt row, he said, 'but it ought to be a solution the French can find it possible to live with.' Mr Gummer also complained that the talks had been bedevilled by a hectoring approach from the US.