French trade view irks Mandelson

Peter Mandelson has accused France of being "needlessly defensive" over farm subsidy cuts as he and other officials try to revive global trade talks.

The EU trade chief also called on France to ensure global trade reform did not become a "political football" ahead of April's presidential election.

Differences over a range of issues have left global trade talks stalled and time is running out for a deal in 2007.

Business groups say failure to secure a deal could have far- reaching effects.

Political pressure

Mr Mandelson's comments follow his meeting with French Prime Minister Dominique de Villepin last week, talks which he had previously described as constructive.

Paris opposes more concessions on farming subsidies over and above the 39% cut in trade support proposed by the European Union in 2005.

Trade ministers from the EU, US and leading developing countries are hoping to kick-start talks when they meet in the Swiss resort of Davos later this month.

Mr Mandelson said he was "optimistic" that fresh momentum could be built but expressed concerns about France's negotiating position.

"France's position is hard, needlessly defensive, because the EU is in a strong position at the World Trade Organization," he told French newspaper Les Echos.

Experts expect little movement from Paris ahead of April's election, with the farming constituency remaining a powerful voice in domestic politics.

Negotiators hope to secure a global trade treaty - concluding what is known as the Doha trade round -this year, before the US government's mandate for considering it on a fast-track basis expires.

Business groups say failure to do this could have "grave" consequences.

In a statement, a body representing business groups in Europe, the US, Japan, India, China, Brazil, South Korea, Australia and Canada, said this could result in "increased regionalism and protectionism, shocks in financial markets and the loss of an opportunity to catalyze domestic economic reform".

Gulf agreement

Separately, the EU has said it hopes to conclude a free trade agreement with Gulf states in the near future.

Any deal with the Gulf Cooperation Council, comprising Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman, would include measures to boost trade and investment and protection for intellectual property rights.

It would also cover cooperation over human rights and immigration.

Mr Mandelson said he hoped discussions opening the way for an agreement would begin next month.

Talks first started as long ago as 1990 but have been on the back- burner for several years as the Gulf states developed their own customs union.