New world trade round is necessary, says EU

A new world trade round would be "more difficult to launch" but "more necessary than ever" the EU Trade Commissioner, Mr Pascal Lamy said last night following talks with his US counterpart, Mr Robert Zoellick.

"Will we get there? Yes," said an upbeat Mr Lamy who insisted that talks between the two economic giants were slowly but surely narrowing areas of disagreement. But both men were very short of specifics beyond insisting that their discussions had moved on to substantive issues.

A re-launch of a WTO round following the Seattle collapse is one of the key issues which the leaders of the G8 countries will take at their summit beginning in Genoa on Friday, ahead of the World Trade Summit scheduled for Dohar in Qatar in November.

Although developing countries are suspicious of an EU-US axis, the truth is that the two most important economic powers in the world are still far apart with Europe favouring a wide agenda, and the US a far more restricted one based primarily on agriculture.

Mr Zoellick, the US Trade Representative, warned that despite such suspicions in the developing world "if we fail the poor nations will suffer most".

He said that the Bush administration regarded free trade and the re-launch of the trade round as high priorities and President Bush would emphasise as much in Genoa.

On the difficult ground of agriculture, Mr Lamy said that the changes made in the EU over the last year had moved the nature of the debate on.

Although the EU and the US were not "eye to eye" they now took a broadly similar philosophical approach.