Top Gatt negotiators meet to save deal: Leon Brittan and Mickey Kantor prepare for some give-and-take

AMID cautious hopes of progress, top European and US trade officials began two days of talks here yesterday in search of a breakthrough in the deadlocked Gatt negotiations for a new world trade agreement before the deadline of 15 December.

The array of disagreements that must be resolved by the EC Commissioner Sir Leon Brittan and Mickey Kantor, the US Trade Representative, is as formidable as ever. But the mood at least is reckoned to have improved after last week's congressional approval of the North American Free Trade Agreement. Even more important, both sides know full well that this is probably the last chance to avoid a failure that could be a devastating psychological blow to limping Western economies.

Every sign is that both are ready for serious business. Sir Leon has brought an unusually large support staff with him from Brussels. 'No one expects a final deal to be struck this week in Washington,' said one EC official yesterday. 'But if we don't get some clear pointers that a bargain is shaping up, we're in bad trouble.'

To do so, however, will require complicated give-and- take across a wide range of disputes, from France's continuing insistence on re- opening the Blair House agreement that would slash agricultural subsidies over six years to Gatt's provisions for transatlantic cultural exchanges, as well as disputes over steel and financial services.

To these has been added another over textiles, where an original US offer to cut tariffs has been clouded by the Clinton administration's promise to domestic manufacturers to delay removal of quotas limiting US textile and clothing imports - a move which helped produce a majority for the Nafta on Capitol Hill.

The tactic drew angry reaction from India and Pakistan, while the European Union is also opposed, on the grounds that it might turn developing countries against bolder measures to open up their own markets. As a big grain exporter, the EU is alarmed by Mr Clinton's pledge to limit, unilaterally if needed, Canadian wheat exports to the US.

In comparison, the wheeling and dealing here to push through Nafta - approved by the Senate at the weekend - was simplicity itself. The hope is that after that triumph and the successful Apec summit in Seattle, the administration will find it easier to make the concessions necessary for a Gatt deal. European officials have been encouraged by quiet US signals that after months of point-blank refusal, Washington may permit some tinkering with the Blair House accord.