Page last updated at 12:52 GMT, Thursday, 17 July 2008 13:52 UK

EU seeks key deal on fruit trade

EU trade chief Peter Mandelson
Mr Mandelson sees free trade as the way to strengthen the global economy

Failure to agree on tropical fruit exports to the European Union would put a global trade deal at risk, the European Commission has warned.

EU Trade Commissioner Peter Mandelson said he would not block compromise proposals on the EU's controversial banana import tariffs.

He warned that if others did, then they would "assume a grave responsibility for the failure of the Doha Round".

Doha is aimed at enabling fairer trade between rich and developing countries.

Mr Mandelson was speaking at a news conference ahead of crucial negotiations between trade ministers, starting on Monday in Geneva. They are taking place under the auspices of the World Trade Organization (WTO).

In a separate BBC television interview, Mr Mandelson described the talks as "make or break", because "the American political calendar will be working against us in the autumn" - a reference to the November US presidential election.

The compromise proposals he mentioned were put forward by WTO Director-General Pascal Lamy, who has called on the EU to gradually reduce its banana import tariff to 116 euros (£92; $184) per ton by 2015, from 176 euros currently. The sharpest cuts would apply early on.

Banana wars

The WTO has repeatedly ruled in favour of Latin American banana exporters in a long-running dispute with the EU. They argue that the EU's preferential trade accords with poor African, Caribbean and Pacific (ACP) countries are discriminatory.

Under Mr Lamy's compromise plan, Latin American governments would drop their legal challenges against the EU.

Mr Mandelson said a successful conclusion to the Doha Round would "bring fresh confidence to the global economy, which is certainly in need of it".

He was speaking at a joint news conference on Thursday with EU Agriculture Commissioner Mariann Fischer Boel, who said the EU would "need to deliver sacrifices", but "it's absolutely crucial that we see payback in other areas".

"We'll need to push hard next week for the improvements we're looking for¿ Much will depend on the readiness of other players to show sufficient flexibility," she said.

French President Nicolas Sarkozy, whose country holds the six-month EU presidency, has accused Mr Mandelson and Mr Lamy of preparing to sell out European farmers in the name of free trade.

On 30 June Mr Sarkozy said Mr Mandelson and Mr Lamy "want to make us accept a deal under which Europe would commit to cutting farm output by 20% and reduce farm exports by 10%".

"That would be 100,000 jobs lost, I won't let it happen," he said.

Ms Fischer Boel rejected those figures on Thursday, saying "we should try to kill those rumours as soon as they come up".

She said increased productivity and new technology had resulted in annual reductions of 2% in the agricultural labour force.

Mr Mandelson said he had a mandate to negotiate on behalf of all 27 EU member states. The EU offer on agriculture would include the elimination of EU farm export subsidies "if others match our efforts," he said.

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