At noon today at a meeting at the Trimdon Labour Club in his constituency, Tony Blair told a group of his friends and political supporters (link requires Real Player) that he has tendered his resignation as leader of the Labour Party and will be stepping down as Prime Minister on 27 June after ten years and eight weeks in the job. The much-trailed announcement is all-but-certain to result in a smooth handover of power to Chancellor Gordon Brown who will lead the Labour Party into the next General Election slated for 2009.

Nominations for the leadership of the Labour Party end next Thursday, at which point there will either be a ‘coronation’ of Prime Minister Brown, or a challenge from one of the two left-wing hardliners who have thrown their hats into the ring. To trigger a challenge, Brown’s adversaries need to get at least 44 nominations from the 354 Labour Members of Parliament, which is by no means assured. Brown’s supporters have indicated that their man has already secured more than 200 nomination promises. On 27 June, once the new Labour leader has been confirmed, Blair will go to the Queen to tender his resignation as Prime Minister.

Readers outside the UK might wonder at why Tony Blair has resigned at all. The reality is that despite his stature on the world stage, and particularly in the US, over the past few years he has become very unpopular domestically, to the point of being an electoral liability for Labour. Blair has always said that he did not want to go ‘on and on and on’ as Margaret Thatcher once promised to do and that the moment he became a liability to Labour he would step aside. In the speech announcing his resignation, Prime Minister Blair acknowledged there may have been times when he fell short of expectations but stressed that he had always acted in his view of the British public interest.

It is chiefly his policy on Iraq, and in particular the ‘breach of trust’ over supposed Iraqi weapons of mass destruction, that has seen his poll ratings fall, but other issues have also marred the latter years of his tenure in Downing Street. These include the ongoing police investigation into allegations that he was complicit in a campaign finance scandal in which it is alleged that 10 Downing Street ‘sold’ seats in the House of Lords to high-value party donors. Labour is also facing a challenge from a resurgent Conservative Party led by its youthful leader David Cameron, who has done much to cast off the reputation of the Tories as ‘the nasty party’ as well as connecting with new issue agendas such as the environment and climate change.

As well as all this, a festering sore at the heart of the Labour government has been the steadily deteriorating relationship between Blair and the other architect of New Labour’s unprecedented successes, Chancellor Gordon Brown. Back in 1994, when in opposition, Blair and Brown were rivals for the vacant Labour leadership and in the interest of party unity (and perhaps realizing that the Blair band-waggon was unstoppable) Brown stepped aside and backed his political ally for the top job. The private deal made between the two has never been revealed in any detail (some say it never existed) but an agreement is thought to have centered upon a carve up of the policy agenda to give Brown control of economic policy in its widest sense within a Blair government and an understanding that power would be transfered to Brown at some point down the line. As time passed, relations soured between the two former friends, although they were often to come out smiling together for the cameras. Shortly after the 2005 general election victory, Blair announced he would not serve the full term of his five year mandate and a climax was reached in the summer of 2006, when a group of junior Labour MPs launched a putsch that failed to unseat the Prime Minister but did enough damage that it became just a matter of time before he would step down. In October Blair told the Party conference that he would be gone within a year.

The intervening months have seen domestic policy development run into the sand as everyone waited for a new leader to take office, and a climate of uncertainty and fractiousness within the Labour Party prevailed while various candidatures as alternatives to Brown were proposed and debated. Ultimately no serious contender has come forward. In the meantime, Blair has also been consciously seeking out ‘closure’ on several key policy areas in a process that some unfriendly commentators have termed ‘legacy shopping’. With the situations in Iraq, Afghanistan and the Arab-Israeli conflict going from bad to worse, and with no end in sight in the long process of reforming British health care and education services, Blair has turned his attention to Europe, Northern Ireland and the fight against global poverty.

Consistently outmaneuvered by French President Jacques Chirac in talks over the EU budget and by Gordon Brown over the decision on whether the UK should join the Euro currency area and with the draft EU constitution barely exhibiting any signs of life after the French and Dutch ‘no’ votes , Blair has failed to seal his term of office by recasting the terms of European Union politics. Having said that, the UK is more engaged in the European integration project than at any time in its history, and much of this is the result of Blair’s instinctive pro-European mindset. While the Gleneagles Summit during the British G8 Presidency brought fanfares of approval from development NGOs and their celebrity backers, and a sense of renewed momentum on the three global development pillars of aid, trade and debt, recent revelations about how little real progress has followed have soured the story somewhat.

In Northern Ireland, however, the achievements are momentous, real, hopefully permanent, and Blair can legitimately claim a great deal of the credit. The scenes in recent months and weeks of former sworn enemies putting down their arms entering into power-sharing governments will live on as a legacy of Blair and also his predecessor John Major, who got the ball rolling during the 1990s.

If journalism is the first draft of history, then reporters, columnists (and bloggers) are already working hard to set the tone for how Blair will be remembered. But it is too early to tell. He will certainly be remembered for the success of liberal intervention in Kosovo and Sierra Leone and for his part in the Northern Ireland peace process. He will also be remembered for manifest failings of the US-British response to the attacks of 9/11, in particular in Iraq. His future career on the highly lucrative international lecture circuit will keep us reminded of what a great gift he has for oratory and how he uses it to making the case for progressive politics and pragmatic internationalism. Always taken by the ‘clash of civilizations’ thesis, there are rumors he will launch a foundation to promote inter-faith understanding.

Blair led Labour to an unprecedented three landslide general election victories, ending 18 years in opposition and going a long way towards making Labour for the first time in its hundred year history, ‘the natural party of government’. This last legacy is the still-smouldering torch he now hands to Gordon Brown who will have to work hard if he is to rekindle the flames, move on from Iraq and secure a fourth decisive election victory in two years time.
More will follow from GMF bloggers on the implications of Blair’s departure…

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British campaigners against European Union plans to outlaw imperial measures like pounds and ounces have claimed victory, according to news reports today. The self-styled ‘metric martyrs’ say they have say they have won the battle to keep Britain imperial, after confirmation from the European Commission’s industry commissioner, Gunther Verheugen, that dual marking of goods in imperial and metric would”continue indefinitely”. Previously the Commission had set a 2009 deadline for the phasing out of imperial measures still widely used in British greengrocers, butchers and supermarkets.
The campaign to keep imperial measures had gathered a head of steam alongside a rash of more fanciful ‘euromyths’ peddled by the UK’s vibrant anti-European press. It has variously been claimed that Brussels would be legislating against curved cucumbers, outlawing the red double-decker buses beloved by Londoners and renaming Scottish kilts as ‘womenswear’. These euromyths so irritated the European Commission that it set up a special website devoted to refuting them.

While pints and miles were always exempt from EU law, pounds and ounces were under threat, and the ‘metric martyr’ campaign was launched following the court conviction six years ago of Sunderland greengrocer Steven Thoburn for using scales that could not weigh in metric units. However, as the Financial Times reports, Commissioner Verheugen’s change of heart is less a victory for ‘Little Englanders’ than an instance of transatlantic regulatory cooperation inaction.

According to the FT, the American Chamber of Commerce in Brussels, which favors a single measurement worldwide, said forcing the change too early”could have severe negative consequences”.”It would be necessary to run two separate production systems – one ‘metric only’ for the EU and another with dual measurements for regions that require it.” Meanwhile, some US states have outlawed metric-only labels.

Weights and measures are probably the most straightforward issue in the growing transatlantic dialogue over regulatory standards, a subject which can get fiendishly technical when it is in the realms of financial regulation, intellectual property or food safety. GMF is fortunate to have transatlantic fellow Richard Salt working on the subject and is also commissioning external research such as this study on data privacy rules by Professor Abraham Newman from Georgetown University.

Technical issues aside, there are three basic ways of approaching the issue of regulatory dialogue. A few years ago there was a good deal of talk, particularly in the US, about ‘regulatory convergence’. While it might sound reasonable that the EU and US could come together on a common set of rules that will make life simpler for citizens and industry on both sides of the Atlantic and in the rest of the world, it very quickly became apparent that ‘convergence’ for US negotiators meant ‘convergence towards the US model’. Understandably, Europeans, wary of the likely watering down of higher EU standards of consumer and environnmental protection, cooled on the idea.

‘Regulatory convergence’ has evolved into the current buzzword of ‘regulatory co-operation’ and this has received a boost under the German Presidency of the EU, a key plank of which was Chancellor Angela Merkel’s plan for greater transatlantic economic integration including moving forward with a Transatlantic Free Trade Area (TAFTA). The agreement on permitting parallel metric and imperial weights and measures is a good example of transatlantic regulatory co-operation in action.

The third and more controversial approach is ‘regulatory competition’ whereby different jurisdictions adopt different regulatory models and market forces determine which set of standards increasingly globalized industries end up following. Think of the contest between Betamax and VHS during the 1980s or the current battle between BluRay and HD-DVD, but with governments rather than companies as the protagonists. The EU, with close to 500 million citizens, is now a larger market than the US and for the first time in history, the EU and the US carry more or less equal weight in terms of setting global regulatory standards. This competitive model played out on the global stage is interesting because it is by no means inevitable that it will cause a ‘race to the bottom’ as is often argued by critics of globalization. In fact, many companies, when facing the realities of global supply chains and the economies of scale inherent in manufacturing, may choose to adopt the higher standard across-the-board simply because it is cheaper for a global company to meet one single (if higher) standard than to run two entirely separate production processes.

In one distinctive front in this battle over regulatory standards, EU and the US are both working hard to export their own regulatory standards to third countries through bilateral free trade agreements, and with the stalling of the Doha Round of multilateral negotiations at the WTO, we are likely to see much more of this going on. Each believes that this will tilt the playing field in favor of their own companies, which have a vested interest in international adoption of their domestic standards.

Until very recently, the US has been the world’s global standard setter, but the EU has woken up to the realities of its increased market power in the global economy and is using it as an economic counterpart to the more traditional tools of European political and social ‘transformative power’. Whether we will see more co-operation or more competition in the years ahead is hard to tell. Meanwhile the British ‘metric martyrs’ are no doubt raising a pint glass to the reprieve of pounds and ounces, albeit thanks to the flexibility of the global economy.

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On Thursday this week, British Prime Minister Tony Blair will announce the date he will step down as premier, all but cementing a July handover to his long time political friend and rival Gordon Brown. As Chancellor Brown moves nextdoor into Number 10 Downing Street, he faces some big challenges on the economy and on reinvigorating the domestic policy agenda. But the only way he will be able to make the necessary break with the Blair era and restore the Labour Party’s electoral fortunes is to offer a full and unequivocal apology for the mistakes of the government’s policy towards Iraq.

The Labour Party that he will lead into the next general election in two year’s time trails a resurgent Conservative Party in the polls by as much as ten percentage points. In last week’s elections to the Scottish Parliament, Labour was kicked out of office by a Scottish National Party committed to full independence for Scotland. Labour also suffered heavy losses in the Welsh Assembly and in local government elections held on the same day.

For the past ten years the UK economy has performed better than any other in Europe and has seen greater stability than in the US, but there are clouds on the horizon. Inflation and interest rates are inching up, with the latter increasing the chances of a painful hard landing ending the house price boom. The pound has strengthened and is now worth more than two dollars. This might be good for British holidaymakers in Florida or weekend shopping sprees in New York, but British exporters are facing less favourable terms of trade. Labour’s increases in funding for schools and hospitals have been significant but there are concerns that the money has not always resulted in commensurate improvements in the performance of these core public services. Terrorist attacks, fears about immigration and a spate of violent knife and gun crimes in British cities further undermine what pollsters consider as the all important ‘feel-good factor’.

But this is all really just window-dressing for the main reason why Tony Blair’s government has become so unpopular: the invasion and occupation of Iraq. Blair’s fate is sealed and he will never get out from under this cloud. Unless Brown does something dramatic to break with the past, the complex cluster of issues around the government’s Iraq policy will blight his premiership as well.

Blair has already annouced the timetable for a planned withdrawal of British troops. This move barely registered in the polls, so Brown will need to do more than get British troops out of Iraq. He will need to address the real reason why British voters so disapprove of Blair’s Iraq policy. These boil down to two issues: first, Parliament (and the public at large) was duped by bad intelligence and political spin about Saddam Hussein’s weapons of mass destruction as the reason for the invasion; second, Britain went along blindly with the Pentagon’s disastrous policies for the rebuilding of Iraq, the most egregious of which was the disbanding of the Iraqi army and police forces.

For politicians, sorry is the hardest word. Hillary Clinton has so far refused to say it and she will find it hard to beat Barak Obama for the Democratic Presidential nomination unless she recants her Senate vote for the invasion of Iraq. Gordon Brown must not make the same mistake. He must apologise for government’s mistakes and be clear that he was there at the Cabinet table when these things were discussed. Blair asked the British people to trust him on Iraq, and that trust has been destroyed. The public will only give its trust again if the government admits its mistakes. Rather like Mrs Thatcher before him, ten years in office have made Blair a creature consumed by his own vanity, self-importance and sheer stubbornness. Just as Bush will never bring himself to say sorry, nor will Blair. That is why Brown must do so. And quickly.

As well as being the right thing, in political terms it will be a smart move. The Conservative Party fully backed the war and David Cameron, the new Conservative leader has not yet admitted he and his colleagues made a mistake. In saying sorry, Brown will outflank Cameron’s Conservatives, jumpstart the process of rebuilding trust with the electorate, reconnect with Britain’s key continental allies that opposed the war, and most simply but most importantly, give himself the chance to move on to the new issues facing Britain.

As a new Prime Minister, Brown needs to show that he can deliver the things that his predecessor has been unable to achieve – both at home and abroad. What better way to start than with the one act that his predecessor can never, will never, do – say sorry for Iraq.

European Union Agriculture Commissioner Mariann Fischer Boel will be in Washington DC on Thursday and Friday this week for meetings with all the key farm policy players in the Administration and in Congress. A deal between the EU and the US on cutting farm tariffs and subsidies holds the key to the stalled WTO ‘Doha Development Agenda’ trade negotiations. While EU Trade Commissioner Peter Mandelson is responsible for Europe’s trade policy as a whole, it is important to remember that agricultural trade remains the exclusive domain of Mrs Fischer Boel. Last week the US Administration published its draft Farm Bill, will this week’s talks help break the logjam?
For the past twelve months or more, it’s been a case of ‘after you, no, after you’, with the EU calling on the US to reduce the amount of trade-distorting aid it pays out to farmers, and the US calling on the EU to cut the tariffs it applies to imports of food into Europe. However, in recent weeks there have been stirrings of movement. Last month, President Bush urged his own top trade negotiator Susan Schwab and the EU’s Peter Mandelson to ‘go to it…just get it done’. Two weeks later, representatives of the United States, the European Union, India, Brazil and almost two dozen other countries met at Davos, Switzerland for the first time since talks were suspended. And last week the Administration published its draft farm bill. The complex package of proposals was carefully spun by Agriculture Secretary Mike Johanns depending upon which audience he was speaking.

Secretary Johanns is keen to tell US farmers that his proposals mean more money for them. With commodity prices currently high, the counter-cyclical payments that form the basis of several key US farm handout programs are less and less likely to kick in, thereby reducing the amount of US tax dollars going to farmers. So Johanns has been able to claim that replacing some counter-cyclical payments with a new concept of ‘revenue insurance’ will mean US farmers will stand to receive $5 billion more in support (over five years) than they would do under the current system of support. When presenting the proposals to international audiences, Johanns said that they would allow the US to reduce significantly the upper limit on its trade distorting farm support payments.

Squaring the two logically contradictory propositions (that farm subsidies will go up and that they will go down) requires that the US transform some of its existing trade distorting subsidies into non-trade distorting subsidies and put them into the ‘green box’ of payments that are made independent of any farm production. This is what was achieved by the EU’s ‘Fischler reforms’ which from 2005 decoupled most EU farm payments from production. But decoupling is unlikely to impress Brazilian and African cotton producers, who believe that it could mean more help for US cotton producers, not less.
International reaction to the Administration’s farm bill proposals has been mixed, reflecting both the fact that federal farm supports are hideously complex and the fact that the proposals have been spun in different ways to different audiences. It has left some sharp-witted commentators to ask”Will the real Administration farm bill please stand up?”. WTO-watchers around the world are coming to a consensus that if the US agrees to reduce its ceiling on trade-distorting farm support to $15 billion and the EU agrees to an average agricultural tariff cut of 54%, with strict limits on the product lines subject to lower reductions, this could unlock a wider Doha Round deal.

Both the EU and the US could certainly live with this, if they felt it would clinch a wider deal with the developing country bloc led by Brazil, India and China. This week Commissioner Fischer Boel should stress two things to Congressional leaders and those in the Administration. First, that the EU remains strongly committed to the WTO’s multilateral rules-based system for managing international trade and that this deal is needed to prevent the WTO from withering on the vine. Second, that she has the political muscle to secure agreement from EU member states on the 54% tariff cuts necessary to deliver on the EU’s side of the deal. In short, at this final hour, the EU is ready to make a Doha deal. The US must not allow itself to snatch defeat from the jaws of victory.

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The Financial Times has reported on new figures from the French government statistical service showing that French farmers are”getting steadily worse off compared with their fellow citizens and their European peers”. Such figures are grist to the mill of those calling for a strong defense of EU farm support from the internal pressure of the EU budget and the external pressure of the WTO’s Doha Round of multilateral trade liberalization negotiations. What such figures fail to show is the changing structure of farming in France as in other European countries and the likelihood that subsidies are actually accentuating inequalities.According to the analysis,

While average French households became richer over the last decade, as incomes rose 1.8 per cent between 1997 and 2003 to ‚¬28,410, the income of the average French farming household fell 1.8 per cent to ‚¬30,630.

This shows that on average French farm households have higher incomes than the rest of the population, although the gap is narrowing. The FT points out that

“French farmers receive about ‚¬9bn ($11.6bn, £6bn) of CAP handouts a year, more than a fifth of European agriculture spending, which in turn accounts for 40 per cent of the EU budget.”

Analysis of official statistics by farmsubsidy.org shows that on average, each French farm receives ‚¬15,200 a year in EU support payments under the common agricultural policy (CAP). However, this average can be misleading since the distribution of payments is heavily skewed in favor of the largest farms that have the greatest economies of scale and the most productive land. In 2004, 36 per cent of French farms received less than ‚¬5,000. 51 per cent received less than ‚¬10,000. The reason for this is that CAP payments reflect output levels. Even now that they are ‘decoupled’ from production, they are based on historic entitlements and yields.

The FT notes that French farm household incomes would have shown an even steeper decline had it not been for farm families taking off-farm employment to supplement income earned from farming. Off-farm income is becoming an ever more important component of farm household income both in Europe and the United States, as farming families struggle with falling commodity prices and rising costs of farm inputs like fuel. Off-farm income is particularly important for smaller farms.

Ultimately, what has been happening in France and other EU member states over the last few years is a ‘hollowing out’ of middle sized farms, as these farmers either decide to go for growth by buying or leasing more land and thereby become larger operations, or alternatively sell up or rent out their land and in doing so reduce their farming activities to a much lower level.

The result is an increasing number of larger farms that benefit from economies of scale and at the same time an increasing number of small hobby or lifestyle farms that are not primarily dependent on farming income for survival. In the US, it is argued that support payments are actually accelerating this trend since the large farms that receive the largest payments are able to use them to buy up their smaller neighbors. Since 80 per cent of CAP payments go to the largest 20 per cent of recipients it is quite feasible that this is happening in Europe too. Last November, GMF published a new study of farm payments in Germany that shows how farm subsidy payments are an important source of inequality in farm profitability.

Farmers have always been an important constituency in French elections and presidential front-runners Ségolène Royal and Nicolas Sarkozy have both declared that if elected they will stand up for French farmers (no surprise there). Yet neither has explained in any detail what this might mean in policy terms, and whether they would depart from the simple Chirac formula of resisting at all costs any changes to the CAP. What is certain is that, regardless of what politicians in Paris or Brussels may do, French farming – like farming across Europe – is experiencing fundamental, wide-ranging and ever-accelerating change. If politicians wish to serve their rural communities, encourage vibrant food sectors and safeguard the beauty of the countryside landscape, then they must face up to the tough realities of rural change, resist the special pleading of sectional interests and look beyond romanticized images of a bygone rural idyll that never actually existed.

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EU Trade Commissioner Peter Mandelson and US Trade Representative Susan Schwab held a very short press conference immediately following European Commission President José-Manuel Barroso’s visit to Washington DC on Monday. Mandelson said”we’re in the end game” of a multilateral trade negotiation that Schwab described as resembling”three-dimensional chess”.

Fresh from meeting President Bush at the White House, both negotiators played down the looming expiry of the President’s Trade Promotion Authority, or ‘fast track’. According to Schwab:

“Ultimately it’s content over chronology. Nobody is going to reach an agreement on the basis of an artificial deadline if the content isn’t there that is substantively and politically viable… On the other hand I think we all have a sense of urgency and wanting to get this done sooner rather than later, because it’s the right thing to do.

This could well be a tactic to avoid a confrontation between the Administration and the new Democrat-controlled US Congress, currently locked in a fierce battle over the President’s plans for the deployment of more American troops in Iraq. Mandelson specifically referred to meetings with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid giving him”renewed confidence that the Doha deal is doable and within the narrow timeframe that has opened up.” President Bush referred to the”the spread of wealth and opportunity through open and reasonable and fair trade”. Fair trade is a term often used by Democrat critics of ‘free trade’.
Mandelson identified agriculture as the source of principle differences between the EU and US, but recognized the need for progress in manufacturing and services as well. US lawmakers are set to begin drafting a new farm bill in the coming months, and will have a keen weather eye on any progress in the Doha negotiations. Separately, Canada is believed to be preparing a WTO case against US corn subsidies.

According to Mandelson, President Bush’s last words to them were”Go to it, Susan. Go to it, Mandelson. Just get it done.” I would suggest that it may take a little more than this from the Oval Office to, as the saying goes, ‘get to Yes’.

Will the President be able to focus his energy on trade while he’s surging in Iraq?

Will Congressional leaders, from the party of Woodrow Wilson and FDR, risk fatally wounding one of the few pillars of multilateralism that has survived the neo-conservative assault?

Will Europe and the United States deliver on a trade deal that lives up to the ambition of giving billions in the Global South the chance of a better life?

Talks between negotiators will continue in the weeks ahead and the next opportunity for a breakthrough is at the World Economic Forum meeting in Davos Switzerland on 24-28 January 2007.
You can read a transcript of the press conference (PDF format).

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It must be frustrating being the President of the European Commission: a whole lot of responsibility but very little power. When Jose Manuel Barroso meets George W Bush at the White House next week he may be able to offer some advice to a US President who has just lost control of Congress and is watching his Iraq strategy slip further into chaos.

On the agenda is climate change, international security and global trade. Bush is currently the world’s leading climate change denier and the chances of him recanting are as good as those of snowball in hell – or the polar ice caps, the way things are going. On international security, the EU lacks a standing army and even a foreign minister, so Barroso has very little to offer here. It is only trade policy that the two men can use this high level meeting to achieve something concrete: sealing a deal that has so far eluded their respective trade negotiators at the WTO in Geneva. Presidential €˜fast track’ Trade Promotion Authority (TPA) will expire in a matter of months, and so if there is to be a deal on Bush’s watch, it needs to be made now.

While the days when the EU and the US could stitch up trade deals bilaterally and the rest of the world would follow along behind are long gone, it is American intransigence on farm subsidies and European stubbornness on agricultural tariffs that caused the collapse of the Doha talks last summer. At the WTO in Geneva there is a the sense that one last push to reconcile differences on agriculture would enable negotiations on manufactured goods and services to fall into place. With farm commodity prices rising – and with them farm incomes – both the EU and the US have probably just enough negotiating space to improve their offers. As a down-payment for developing countries, Bush could offer to open US markets to exports from the world’s 50 very poorest countries – something the EU has already done – and the EU could extend its existing trade concessions to the whole of sub-Saharan Africa.

Even with TPA, Bush will have to get any deal through a Congress now controlled by a group of resurgent Democrats who were swept to office on the back of Bush’s personal unpopularity and in many cases with a strong whiff of protectionism in their campaigns. Whatever they said on the campaign trail, Democrats in Congress know that what they do this year and next will determine how successful they will be in raising the enormous amounts of money needed to run a successful presidential bid. Talking tough on trade might win support from the industrial heartlands and organized labor, any Democrat challenger for the White House knows that it is the big money donors from California and Wall Street that count. These are wealthy people who have made their fortunes from the global economy, embracing the opportunities of new technology in a changing world. They will not take kindly to a party showing protectionist tendencies. And when it comes to the crunch, would the party of Woodrow Wilson and FDR really block the trade round – and in doing so wreck the WTO, one of the very pillars of international multilateralism?

In Europe it has been France that has most strongly opposed any further opening of agricultural markets of ‘fortress Europe’. Over the years President Chirac has run rings around a succession of reform-minded leaders from Britain and Germany and is currently holding a gun to the head of EU Trade Commissioner Peter Mandelson, threatening to veto anything he agrees that is against the national interest of France. But France is changing and Chirac is on the way out. Whoever is elected as the new French President in May this year will be able to blame a Doha deal agreed now on his or her predecessor, and thereby escape the wrath of the voters. But again, time is short.

With the European integration project in the doldrums since the rejection of the draft EU constitutional treaty by French and Dutch voters, Barroso has been trying to regain some legitimacy and popularity for European institutions, largely on the basis of his Commission’s ability to deliver tangible benefits for European citizens. But so far he’s looked more like a competent administrator than a great statesman.

Neither Barroso nor Bush have to face the voters in elections. This should embolden them to break the deadlock in the world trade talks. They can surely withstand the political heat from powerful domestic farm lobbies in the knowledge that history will recognize the courage and wisdom of their actions. Rescuing the Doha Round would be an act of transatlantic cooperation with a lasting legacy.

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