Prospects of world trade talks boosted

Prospects for a new world trade round were heightened yesterday by the first talks here between the EU Commissioner for Trade, Mr Pascal Lamy, and the new US Trade Representative, Mr Robert Zoellick.

Mr Zoellick told journalists following the meeting that he believed that by the summer it should be possible to set a timeframe for a new round.

Mr Lamy, welcoming the US commitment to such a round, said that in his talks on Capitol Hill yesterday he had emphasised that Congress could send a signal of its good intentions if it moved to give Mr Zoellick so called fast-track negotiating mandate. The latter said that the issue was one to which President Bush attached considerable significance.

The talks, which were supposed to be get-to-know-you in character, covered a wide range of issues from Chinese accession to the WTO to access by the developing world to drugs needed to combat HIV.

Mr Lamy and Mr Zoellick, representing the two largest trading blocs in the world, are seen as the key figures in any relaunch of the Seattle world trade process. Despite a large US part in the collapse of the latter, particularly a last-minute hardening of the US stance on minimum labour standards by President Clinton, there have been growing calls from business here for a speedy relaunch.

EU officials concede that such a prospect should be easier given President Bush's pro-free trade rhetoric, and his lack of trade union ties. But they cautioned against underestimating the problems that an evenly divided Congress could cause - hence the emphasis on fast-track authority. Apart from the broader issue of a new world trade round, the two discussed a number of running US-EU disputes: EU attempts to regulate banana imports; the EU ban on beef treated with growth hormones; the special tax treatment of US "foreign sales corporations"; and US extraterritorial legislation allowing the penalising of foreign companies who trade with Cuba.

Mr Lamy announced that the EU has decided to put back until July its implementation of a new regulation governing banana imports which is disputed by the US as incompatible with WTO rules. The "first-come first-served" regulation was agreed in January by ministers following a ruling by the WTO that the EU's old regime was in breach of its rules and the deferral of implementation should allow talks to see if the dispute can be resolved.

Both men expressed exasperation with a row that has gone on for eight years and their commitments to resolving it.