World trade deal 'on knife edge'

Mr Mandelson wants a deal in place for the December talks

Moves to agree a new world trade pact are on a "knife edge", the European Union's (EU) trade chief has warned.

Peter Mandelson urged Europe to act to end a stalemate with other key World Trade Organization (WTO) members by offering to cut farm import tariffs.

The comments came as the US also warned that unless Europe opened up access to its markets a trade deal was at risk.

WTO members are to meet in Hong Kong in December to agree a world trade pact in a bid to lift millions out of poverty.

WTO ministers are currently taking part in intense negotiations aimed at agreeing the broad outline of a deal to be agreed at the Hong Kong talks.

"I do not exaggerate when I say that the Hong Kong ministerial meeting is on a knife-edge," Mr Mandelson said.

"We signed up to a 'substantial improvement' in market access. We have to make an offer on this basis that can be both prudent and real," Mr Mandelson said during a speech in Leeds.

Impasse

Mr Mandelson's comments were seen as upping the pressure on France, one of the main beneficiaries of EU agricultural payments.

And France - which recently accused Mr Mandelson of exceeding his negotiating mandate - seemed to ease its position slightly.

Foreign minister Philippe Douste-Blazy said "confidence had returned" after the European Commission agreed to meet experts regularly to discuss the talks.

Last week, the country had demanded farming be dropped from the discussions after it accused Mr Mandelson of making too many concessions on farm aid.

Agriculture has become a key sticking point for the upcoming talks as key nations such as the US, Australia and Brazil are demanding that Europe slash import tariffs.

Currently the US is demanding that duties be cut by between 55% and 90%.

However, the EU has said it will only exceed 50% on its highest tariffs. It also wants a wide number of exceptions to the cuts.

Many poor nations whose economies depend on farm exports are demanding a deal on the issue before they open up their markets for other goods.