MercoPress. South Atlantic News Agency

WTO talks: more concessions are still needed

United States and European Union must make more concessions if a global trade liberalization treaty is to be reached said Pascal Lamy, head of the World Trade Organization (WTO) in Zurich.

US and EU officials are under intense pressure to secure an outline deal for lowering global trade barriers, particularly regarding agriculture subsidies and import tariffs, at December's coming WTO summit in Hong Kong.

So far US has offered a 60% cut in farm subsidies if Europe and Japan make deeper cuts, but France is angry about cutting farm subsidies claiming EU members were not properly consulted.

Mr Lamy said he believed recent trade talks had gained new momentum, describing Monday's US offer to cut farm subsidies by 60% as a "politically significant contribution". However he was also cautious recalling that time was running out and that even when "the engines of the negotiating plane have been switched on again, I am not sure it is enough to take us to the right approach zone."

EU Commissioner Peter Mandelson who is leading trade talks on behalf of the Europe Union praised the US proposal for a 60% cut in farm subsidies and a 90% reduction in farm import tariffs and called on a "common policy approach" between the US and Europe to reduce trade distorting financial support for agriculture.

"We need early concrete steps to start translating that vision into practice" he said adding that EU is doing better than the Americans on subsidy reduction "but we have to focus on tariff reduction."

However the French government is reported to be angry about Brussels' handling of the trade discussions, claiming that Mr Mandelson made offers about opening access to EU markets without first consulting member states.

Le Monde newspaper reported that President Chirac had written to European Commission president Jose Manuel Barroso to express his concern about the direction of the talks.