Oxfam withdraws backing for trade deal talks

Oxfam has abandoned its support for the current talks on a new trade deal, saying Europe and the US have failed to live up to their promises to use trade to cut poverty in the world's poorest countries.

In a marked U-turn after four years of support for the painfully protracted negotiations, the global aid agency will today warn poor countries the deal currently on the table would make them worse off.

The move comes as MPs blame the UK for failing to use its presidency of the EU last year to force through a better deal.

It said no deal was better than a bad deal, accusing the leading rich countries of failing to offer meaningful cuts in farm subsidies and tariffs.

It blames Peter Mandelson, the European trade commissioner, and his US counterpart Rob Portman for playing a game of brinkmanship that has sidelined the poverty agenda - at the heart of the talks when they were launched in November 2001.

"Hopes of a development-friendly trade deal are dwindling and damage imitation is the order of the day," said Jeremy Hobbs, director of Oxfam International.

"Claims by rich countries that what is on offer now is pro-poor are entirely false - current proposals would hurt rather than help developing countries."

Ministers from the 150 World Trade Organisation (WTO) members had planned to meet in Geneva this weekend to hammer out a deal, but it was abandoned this week as it emerged a deal was still out of reach.

Unless they strike a deal by July, it will be impossible to agree final terms by June 2007 when President George Bush loses his right to agree a deal without having to go before an increasingly protectionist Congress.

In a separate report, MPs on the International Development Committee blamed the Government for failing to use its EU presidency to push for a better offer before the last WTO meeting in Hong Kong in December.

"To some extent the UK Government had overplayed its hand, making more of the Presidency than it could deliver," it said.

It urged the EU to improve its offer, saying there was "good reason" for Mr Mandelson to blink first.

The World Development Movement, a longstanding critic of the WTO, said it showed that the talks should be called off.

Peter Hardstaff, its policy director, said: "It confirms our view that the UK has behaved cynically and dishonestly on trade by saying one thing in public and doing another in private."The Department of Trade and Industry defended the UK's role, saying that as President it had to get an agreement on a mandate for Mr Mandelson.

"Without that we could have had another Cancun or Seattle [when talks broke down].

Our responsibility was to keep things together."Mr Mandelson yesterday said the EU could enhance its own offer on farm trade - as long as it received the kind of concessions it wanted from others.

"If the United States is similarly willing, as reports indicate, to negotiate further on its agriculture offer, this is an important advance," he said.

On Tuesday, Mr Portman said he did not rule out making deeper cuts in US farm subsidies but that that depended on other countries including Europe offering more access to their markets.

Mr Mandelson also urged Brazil and India, which have criticised the EU's offer, along with China and other emerging countries to "assume their responsibilities" in the talks.

But Kamal Nath, India's commerce minister, said he would not support any deal that harmed industries.

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