Blair challenges EU, US to take 'bold' trade steps

Tony Blair tonight challenged the United States and the European Union to take the "bold" and "ambitious" steps needed to make…

Tony Blair tonight challenged the United States and the European Union to take the "bold" and "ambitious" steps needed to make a success of next month's critical international trade negotiations in Hong Kong.

The British prime minister used his annual speech to the Lord Mayor of London's banquet in the Guildhall to urge Washington and Brussels to "break the logjam" which threatens the talks by making further concessions on agricultural subsidies and tariffs.

In return, he said, developing countries such as Brazil and India must do more to open up their industrial and service sectors to foreign involvement.

Mr Blair told his audience that a success at Hong Kong will benefit the economies of the developed world and help to improve the living conditions and standards of billions of people in the developing world.

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That, the Prime Minister suggested, would help to lessen the threat posed by conflicts around the world, as well as global terrorism.

Mr Blair said: "In a modern world there is no security or prosperity at home unless we deal with the global challenges of conflict, terrorism, climate change and poverty. Self interest and mutual interest are inextricably linked. National interests can best be advanced through collective action.

"Calculate not just the human misery of the poor themselves. Calculate our loss: the aid, the lost opportunity to trade, the short-term consequences of the multiple conflicts; the long-term consequences on the attitude to the wealthy world of injustice and abject deprivation amongst the poor.

"We will reap what we sow; live with what we do not act to change."

With just four weeks to go to the World Trade Organisation gathering on December 13, fears are growing that the grand words uttered by G8 leaders at Gleneagles earlier this year may not result in a meaningful deal in Hong Kong.

Despite offers from major players like the US and EU to consider reductions in agricultural subsidies and tariffs in order to open up markets to poorer nations, negotiators have so far held back from the kind of breakthrough sought by anti-poverty campaigners. In his speech tonight, Mr Blair voiced concern that the pre-Hong Kong summit talks appear to have "stalled".

Mr Blair said: "We need a comprehensive, ambitious agreement to cut barriers to trade in the three key areas: agriculture, non-agricultural market access, and services. The aim of Hong Kong has to be to create the conditions whereby, by the end of 2006 we can get there. "To break the logjam, the EU and the US must go further, within the negotiations, on agriculture. We must reduce trade distorting subsidies; we must see a credible end date for export subsidies; we must put an ambitious limit on the number of sensitive products that can be afforded extra protection.

"In return Brazil, India and others must move on cuts in industrial tariffs, services liberalisation, with proper flexibility for developing countries that need to sequence their commitments in line with their development needs." Specific measures to help the poorest countries, Mr Blair argued, should include: doubling investment in infrastructure; eliminating all forms of export subsidies; providing access to rich country markets; strong action on commodities of special importance to poor countries, such as cotton and sugar; and simplifying rules applied to exports from the poorest developing countries.