The Telegraph
Since 1st March, 1999
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Deadlock on dollar, progress on arms

Evian, June 2 (Reuters): World leaders, seeking to display renewed cooperation after the damaging Iraq crisis, voiced confidence in a global economic recovery today and agreed on steps to stop the spread of weapons of mass destruction.

But the Group of Eight leaders made no substantial progress on deadlocked world trade talks and gave no clear signal of how to deal with the dollar’s recent rapid slide — a key factor troubling the US’ major trade partners.

The leaders issued a strong joint pledge to fight the spread of nuclear, chemical and biological weapons and prevent them falling into terrorist hands.

They also called for a crackdown on small, shoulder-held anti-aircraft missiles, so-called “Manpads”, such as the one that nearly shot down an Israeli airliner in Kenya in November.

British Prime Minister Tony Blair said they shared optimism that their anaemic economies would recover soon if they stuck to painful but necessary pensions and welfare reforms.

“There’s acceptance within the euro zone and within Europe that provided we do face up to and overcome these challenges of structural reform, we’ve got every prospect of resuming strong growth in the near future,” he told a news conference.

Blair cited German welfare and labour market reforms, France’s bitterly contested attempt to overhaul state pensions and his own effort to charge higher university fees as essential moves to cope with economic challenges of globalisation.

The G8 leaders from the US, Russia, Japan, Germany, France, Britain, Italy and Canada discussed the dollar’s fall of about 15 per cent against the euro this year, but issued no statement on currency volatility. A White House spokesman reiterated the standard line that the US supports a strong dollar but the market determines the level.

A declaration on the world economy to be issued later would send the morale-boosting message that falling oil prices and resumed political cooperation among squabbling allies had brightened the outlook for business, a G8 source said.

But there was no boost to confidence from a trade statement, which, while pledging to complete global liberalisation talks on time by the end of 2004, skirted transatlantic rows that have stalled negotiations so far.

The declaration on weapons of mass destruction called these arms and the threat of terrorism “the pre-eminent threat to international security”.

It said the world community had to use inspections, export controls “and if necessary other measures” to tackle the threat of these weapons, in an oblique reference to the possible use of force. It made no reference to the US-led war in Iraq, launched on the premise that Iraq possessed yet-to-be-discovered banned arms but which half of the G8 countries opposed.

Since last year’s G8 summit in Canada, “events in the world have underscored the relevance of those principles and the urgency of implementing them,” the statement said.

And the G8 countries singled out North Korea and Iran for criticism over their nuclear programmes. “We strongly urge North Korea to visibly, verifiably and irreversibly dismantle any nuclear weapons programmes,” it said, adding Iran’s nuclear programme could lead to illegal weapons as well.

“We will not ignore the proliferation implications of Iran’s advanced nuclear programme,” it added, appealing to Tehran to comply with its obligations under the Non-Proliferation Treaty and accept more intrusive UN inspections without conditions.

Iran recently acknowledged it had a far more extensive nuclear research programme — including uranium enrichment — than previously declared. But it denies seeking atomic arms.

US deputy defence secretary Paul Wolfowitz said today that Washington had imperfect intelligence about communist North Korea’s nuclear capability, but took seriously Pyongyang’s assertions it has atomic bombs.

Washington has also piled pressure on Tehran, accusing it of seeking nuclear weapons, backing international terrorism and undermining West Asian peace efforts. It also alleges Tehran is interfering in efforts to rebuild neighbouring Iraq.

The G8 said it would create its own Counter-Terrorism Action Group to offer aid to countries to prevent them becoming safe havens for terrorists and to boost their security arrangements.

Anti-summit protests tailed off today after violent rampages through Swiss cities on the other side of Lake Geneva by anarchists and anti-capitalists yesterday, in which police detained several hundred youths in Geneva and Lausanne.

Three activists of the Greenpeace environmental group were intercepted by police as they tried to force their way into Evian from the lake in a rubber speedboat. They were handcuffed and shipped back across the lake on a police launch.

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