France defies Hurd threat on EC unity to win trade row

European unity.

Mr Major's avowed aim of blunting French threats to veto a new world

trade order, giving him some much-needed support at home, were cleverly

circumvented by the French who drew support from other EC states

including Ireland, Spain, and Belgium.

At the end of a long night of bitter exchanges the British appeared

finally prepared to fall into line with France, whom Mr Major and

Foreign Secretary Douglas Hurd had pledged to resist, in the interests

of a common approach.

The French appeared on the brink of winning enough sympathy for their

opposition to the trade deal struck last year between the EC and the US

to have the whole agreement re-examined against EC Commission wishes and

in the face of stern opposition from Britain.

Before the deal was struck, the British made the stark threat they

might pull out of the EC Council of Ministers, thus risking seismic

consequences for European unity.

The threat was made tacitly by Mr Hurd as the French made unexpected

progress in their year-long campaign to force a renegotiation of the

trade deal struck last year at Blair House in Washington. The French

breakthrough came after talks between German Chancellor Kohl and

President Mitterrand in Paris.

The result was a watering down of suggested conclusions from the

40-odd EC ministers meeting in a ''jumbo'' council session called to

face down French threats to kill the Blair House accord at the risk of

destroying a new order for world trade under the General Agreement on

Tariffs and Trade (Gatt).

During the long-awaited confrontation between the EC and the French,

Mr Hurd told more than 40 Community Farm and Foreign Ministers: ''I

cannot conceive how the EC could continue with normal transaction of

business if it was seen as having caused the collapse of the Uruguay

Round.''

Mr Hurd, speaking with unusual bluntness and with the personal backing

of Mr Major, said collapse of the round, bogged down after seven years

of dispute, would wreck attempts to reach a global deal under Gatt.

''It is not the case that in causing a crisis in Gatt we can avoid an

internal EC crisis,'' Mr Hurd warned. ''One will inevitably lead to

another.''

Angered by what they see as French chauvinism threatening world trade,

Britain's four Ministers at the talks led the anti-French assault.

Later, Foreign Office officials agreed privately that the idea of a

British boycott of the Council of Ministers was an option and should not

be excluded.

As the dispute continued into the night, there were signs that

Britain's central objection to the French stand was being circumvented.

A series of draft conclusions prepared by the Belgians, holders of the

EC presidency, appeared to lean towards the French view, supported by

Ireland and Spain. But the wording, talking of the EC finding

''clarifications and additions'' to Blair House, appeared too little for

France to accept and too much for the British to swallow.

Then the French announced they had the Germans on board and the

Ministers went into a fresh session. Significantly, the words

''clarifications and additions'' were missing from a German text of

proposed conclusions.

French-backed wording dodged the critical question of whether the

Blair House deal was at odds with the EC's reformed common agricultural

policy, as the French insist in defiance of EC Commission and British

opinion.

When Sir Leon Brittan, chief EC negotiator with the US, argued that

his hands should not be tied, he was tartly told by Mr Alain Juppe,

French Foreign Minister, that he was a ''petty official who had exceeded

his brief''.

The Franco-German ideas backed new moves for the EC to have

''conversations'' as distinct from renegotiations with the US. First

indications last night were that the US would reject new approaches.

Mr Hurd did not use the word ''boycott'' when he told Ministers that

after a French-inspired failure of Gatt, life in the EC could ''never be

the same again'', but his message was clear.

British sources confirmed that a UK-led return to the crisis of June,

1965, when the French crippled the EC with the famous ''empty chair'' in

the Council of Ministers, the main law-making body, when President de

Gaulle pulled his Ministers out during a budget dispute, was possible if

the trade issue was not resolved.

In those circumstances the European Community would grind to a halt.

Mr Hurd said failure to reach agreement would immobilise Gatt and the

reaction would be felt in trade around the world. Mr Hurd urged

Ministers to press on for a deal by December 15, the deadline set by

Gatt's secretary general, Mr Peter Sutherland, for agreement.

If there was no Gatt deal, worth an estimated #160 billion globally as

a restorative after international recession, there was a danger of new

and protectionist trading blocks opening up around the world, Mr Hurd

said.