World trade talks overshadow EU summit

EU splits over world trade talks cast a shadow over debates on globalisation at Thursday’s summit of Europe’s leaders.

UK leader and current holder of the EU presidency, Tony Blair noted a “clear position” from France in the WTO talks but insisted there had to be agreement. 

European Commission President José Manuel Barroso insisted the EU would propose new concessions on farm subsidies to keep WTO talks going.

But French President Jacques Chirac has “reserved the right not to approve” EU efforts to kick start world trade talks with more cuts to EU farm tariffs.

“There is no way we are going to take an extra step. A red line has been drawn and we will not overstep it,” he said.

European Commission president José Manuel Barroso insisted the EU will make a new WTO proposal on Friday.

The move will come as EU ambassadors convene for a crisis meeting in Brussels on the WTO talks.

Perhaps appropriately, the EU’s world trade splits overshadowed a Hampton Court summit focused on meeting the challenge of globalisation.

EU kept leaders up a brave face on Thursday evening, after a day of “convivial” wrangling over political priorities for growth.

“There are differences,” Blair acknowledged after the gathering closed. “But I’m in a much better mood than I was in June.”

A June EU summit failed after London refused to give up its EU rebate from without a promise of cuts in farm subsidies that largely benefit France.

And over lunch there was no escaping the tensions that split London and Paris so acrimoniously over summer.

Most diners said France held to its insistence that it would not allow any change to EU farm subsidies before 2013.

“Securing the budget is going to be extremely challenging but now we have the context. I am not minimising the difficulty but stressing that I will try my best to get an agreement,” Blair pledged.

Barroso agreed that it was going to be demanding but added, “I am more optimistic about this than I was yesterday.”

“This sets the right context for agreement on the budget in December. We need that budget to get on with the EU project. But I feel we are on the move again, we are moving from analysis to action.”

Barroso also hailed the success of his strategy for adapting Europe's social model by freeing up trade, investing more in education, research and innovation and creating a fund to help workers who lose out.

“We did get broad agreement on the commission’s paper,” Blair explained.

But while Britain may have backed the plan some leaders slammed plans for a “Globalisation Adjustment Fund,” saying it rewarded failure and cost too much.

"It could become very expensive for Sweden to take responsibility in this way for other countries which haven't done their homework," Sweden's Prime Minister Goran Persson told reporters.

One of the only practical outcomes from the summit was expected to be agreement on the creation of five working groups on research and development, immigration and security, resources for foreign policy, tackling future energy needs, and demography.

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