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Last Updated: Saturday, 3 December 2005, 15:20 GMT
G7 urges progress on trade talks
Gordon Brown arrives to give the opening address to G7 finance ministers
Mr Brown has been making his views known on trade talks
Finance ministers from the G7 group of nations have called for a revival of world trade talks ahead of a WTO meeting in Hong Kong in 10 days' time.

The talks would be a critical step towards breaking the deadlock in reaching a new deal on world trade, the group said at a summit in London.

Progress should include agreement on a development package to address the concerns of poorer countries, it said.

Developing nations are demanding action on farming subsidies.

UK Chancellor Gordon Brown, the host, has called for the subsidies to be scrapped.

In a statement after their meeting, the ministers also called for international co-operation to lessen the economic impact of volatile oil prices.

The communique also urged China to go further on relaxing state controls on its exchange rate following a small revaluation last July.

Focal point

The two-day summit began with talks between the G7 ministers and their counterparts from Brazil, China, India and Russia.

Trade remains the key issue, with the Hong Kong meeting barely two weeks away.

"We want to do what we can at this opportunity. This is a $300bn issue," Mr Brown said.

He has said he wants richer countries - particularly elsewhere in the European Union - to give up farming support in favour of a fair system of free trade.

The G7 gathers finance ministers and central bank governors from the UK - which holds the presidency in 2005 - plus the United States, France, Canada, Italy, Japan and Germany.

Mr Brown has told delegates that action on trade barriers, tariffs and subsidies would benefit not only developing countries, but the entire world economy.

The Hong Kong talks, from 13 to 18 December, mark the end of the World Trade Organization's Doha development round, aimed at eliminating unfair trade barriers and giving the world's poorest countries easier access to global markets.

The chancellor published a paper arguing for long-term change to create a "sustainable future" for agriculture worldwide - including reform of the EU's Common Agricultural Policy.

Further attempts to reform the CAP have run into opposition, particularly in France, despite criticism of the policy from the US and developing countries.

The US itself has been accused of protectionist policies with regard to its own farmers and markets.

Greenspan warning

The opening dinner on Friday night also focused on the threat of global imbalances such as massive US deficits and slow European growth.

Making his farewell appearance at the conference before retiring in January, Alan Greenspan - 18-year veteran chairman of the US Federal Reserve - warned that trade barriers and an off-balance US economy left the world risking a "painful" adjustment.

The massive US trade and budget deficits had yet to cause serious problems because trade in goods and services kept flowing, he told his G7 peers.

But he added: "If the pernicious drift towards fiscal instability in the US and elsewhere is not arrested, and is compounded by a protectionist reversal of globalisation, the adjustment process could be quite painful for the world economy."

See the finance ministers gathered in London

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