Trade commissioner Peter Mandelson ruffles feathers before WTO negotiations, writes Jamie Smyth

Peter Mandelson must have thought that joining the European Commission would be a walk in the park compared to the turbulent world of British politics.

A confidante of prime minister Tony Blair, he was sacked twice from the cabinet, loathed by sections of the Labour Party and hounded by the press during his career in Britain. But the former journalist and pro-European last year demonstrated his political street-fighting skills by securing the plum job of EU trade commissioner.

Twelve months on and he hasn't had an easy ride in Brussels. There were the so-called "bra wars", when 80 million garments piled up in warehouses across the EU due to a trade dispute with the Chinese in the summer.

Recently, he has become a hate figure for French and Irish farmers, who fear that he plans to sell them out in World Trade Organisation (WTO) talks designed to liberalise global trade in agriculture, industrial products and services. Meanwhile, the British charity Oxfam has had a crack at him for failing to offer a more wide-ranging reform of EU agriculture.

"You are looking at a very frustrated and impatient trade commissioner," quips Mandelson as he takes a break from preparing his negotiating position for the WTO meeting in Hong Kong next week. "There is no offer on the table," he concedes.

He is referring to the refusal of developing countries such as Brazil and India to table an offer to open their markets to services and industrial products for EU businesses before the WTO ministerial meeting in Hong Kong.

With no offer on the table from developing nations in the so-called G20 group, ambitions for the meeting have been lowered and a blame game has already begun among the main players in the talks - the EU, US and the developing nations, such as Brazil and Argentina.

The US and G20 blame Mandelson for not offering enough quota and tariff cuts on agricultural imports into the EU, while subsidising its own farmers.

The EU, in turn, criticises developing nations for not putting forward any firm proposals to open their markets for industrial products and services to EU businesses eager to expand.

Least developed countries (LDCs), which encapsulate some of the world's poorest states, are also unhappy, believing that their trading interests are being ignored.

"The view of our negotiating partners is that agriculture is a key engine in this round of talks. That agriculture liberalisation has underperformed and has been underrepresented in previous trade rounds and, therefore, it is in the agricultural area that we have the most to catch up on," says Mandelson, who readily admits that he is sympathetic to their viewpoint in relation to the need to reform EU agriculture.

But he says reform of EU agriculture cannot be achieved in a single round of talks.

"It has to be absorbable for a country such as Ireland, which will face changes to its agricultural base as a result of the current Common Agricultural Policy (Cap) reforms and what we are negotiating into this programme," says Mandelson.

"I think Ireland's position - which is to implement the current phase of Cap reform and to do it thoroughly, so that by the time we've reached 2013 a sort of minor revolution will have taken place - is right.

"But those who say that the current reforms are enough and we shouldn't progress to further more far-reaching reforms are wrong. I am not advocating reopening Cap, but I do believe that we should take what we have going into this round to the outer limit."

Mandelson's willingness to push agriculture reform to the outer limit has exposed tensions in the EU, pitting supporters of agriculture such as France and Ireland against states in favour of reform of the Cap such as Britain.

These divisions emerged spectacularly in October when Mandelson, who acts on behalf of all 25 EU states in WTO talks, offered to cut farm tariffs by an average of 46 per cent in the current Doha round in an attempt to get serious talks started.

The proposal sparked outrage among French and Irish politicians, already wary of Mandelson's close relationship with Tony Blair - an evangelist for Cap reform.

Twelve other agricultural ministers agreed and Mandelson was summoned to an EU council meeting where the French tried to restrict his ability to make new offers.

"I wouldn't say I was top of the French fan club right now," admits Mandelson, whose claim of victory after the council meeting enraged the French further. "They didn't receive the support of the majority of the council and they don't have a veto."

Mandelson says that all member-states are united in the view that no further EU offer can be made on agriculture until the EU's negotiating partners make some offers of their own. But he reserves the right to make a new offer on agriculture in the future if other players are prepared to make an offer on industrial products and services.

"It [ an offer] would certainly provide me with an incentive to go back to member-states. At the moment, I have no incentive at all," he says. "What we really need is to give Europe more confidence in these negotiations is some serious signals that everyone is going to gain from the negotiations. At the moment, the talks haven't progressed so far out of the agricultural silo to attract serious offers in other areas."

The Doha round of talks is currently on life support. Initiated in November 2001, the negotiations have dragged on for nearly four years with slow progress. This week, WTO chief Pascal Lamy said that the talks were only 55 per cent of the way to a deal as prospects for a breakthrough next week receded amid intransigence from all parties.

The differing characteristics within each group complicate matters, says Mandelson, who notes India is a member of the G20, but has a very different set of interests to Brazil.

Similarly, the group of 90 of the least developed countries include states that would benefit from tariff free access to EU markets. But they also include former colonies of EU states that enjoy special access to EU markets and would be damaged by a removal of EU tariffs and quotas, says Mandelson, who notes NGOs don't always appreciate this.

In the absence of a potential breakthrough in the market access portion of the Doha talks in Hong Kong, Mandelson is pushing a development package that would give LDCs duty and quota free access to certain markets in the EU, US and Japan and even some developing states such as India, China and Brazil.

Talks between the EU and the US and Japan have been encouraging on this issue, with the EU urging other states to adopt its "everything but arms" agreement with LDCs, which offers quota free access to least developed nations.

"I think a deal in this area would put a much-needed human face on the round, which after all is intended as a development round," says Mandelson, who will also attempt to put building blocks in place to enable new talks on market access next spring.

"Above all, I want the meeting to take place in a way that doesn't poison the atmosphere for the negotiation so that we can intensify our talks in 2006," he adds.

Failure in new talks next spring could lead to a collapse of the entire Doha round, which relies on a special fast track US government mandate, which expires in 2007.

"The consequences of failure I think would be very great," says Mandelson. "It would be a huge setback for the multilateral trade system and cause great damage to the WTO. The missed economic opportunities, not only for the developing countries, but for ourselves would be considerable."

Mandelson says that it would also be a personal failure for all those involved in the talks.

"Being associated with success is much nicer and easier than being associated with failure," he says.