BRUSSELS AND HONG KONG

by RAY FLEMING
IT is intriguing that this week two of the founding fathers of New Labour find themsleves a decade later with their backs to the wall fighting EU battles. Tony Blair will be in Brussels trying to negotiate a reformbased EU budget that will not require Britain to give up the famous rebate negotiated by Margaret Thatcher; Peter Mandelson, now the EU's Trade Commissioner, is in Hong Kong at a crucial meeting of the Wolrd Trade Organisation and at the centre of an attack on the EU's agricultural subsidies from the United States and from both better-off and poverty-stricken developing countries. The EU budget, complex though it is, is easier to understand than the so-called Doha Round of the World Trade Organisation which theoretically is due to be completed this week in Hong Kong but seems likely to drag on for some years yet. At issue is the extent to which the many trading restrictions that stand in the way of greater global growth can be eliminated or reduced. Agricultural subsidies are always at the heart of this issue and the EU is being accused both of making insufficient progress in cutting these and in lowering tarrifs against agricultural imports from Third World countries. Mr Mandelson has made a detailed defence of the EU's position and produced an equally detailed list of concessions that developing countries could make in easing access for goods and services from industrialised countries. One of the minor diversions of recent negotiations has been that of the United States and the EU each offering to abolish all agricultural subsidies if the other will agree to do the same, but failing to agree on who should go first. There has been a lot of despondency about this week's Hong Kong meeting and predictions that all the minor progress reached on the Doha Round over the past four years may be lost. But why? The last comparable exercise lasted for nine years and ended very successfully.