BRUSSELS, Oct 26: British Prime Minister Tony Blair was defiant in defeat on Friday, insisting reforms to European Union farm subsidies were inevitable even though a key summit decided to postpone meaningful change for years.

The 15 EU leaders met in Brussels to prepare to accept 10 new members. They agreed on a plan to cap agricultural spending but delayed tough reforms sought by Britain and other supporters of radical subsidy cuts.

The deal caps the farm budget after 2006 and phases in direct payments to new EU members, a triumph for French President Jacques Chirac who was determined to keep the bloc’s costly Common Agricultural Policy (CAP) after enlargement.

Advocates of reform say the subsidies will become too costly when the agriculture-dependent new members come on board.

British officials signalled the prime minister did not contest the agreement, but Blair insisted that tougher reforms were inevitable sooner or later.

The world is only moving in one direction — that is liberalization, Blair told reporters vehemently. This argument will go on...after this summit and over the next few years, he said. The CAP does damage to the developing world. We have to make sure there is change.

Britain wants to phase out direct payments to farmers, which it argues reward them for overproducing and prevent developing nations from entering the market.

But Blair, a champion of enlargement, was ill placed to make a stand lest he be accused of blocking the accession of 10 mostly former Communist countries in 2004.

Not satisfied with winning the argument, a resurgent Chirac repeated his demand that Britain’s rebate on contributions to the EU should be phased out after 2006 when the new members qualify for more farm aid.

It is an indecent situation which cannot be justified, he told a news conference.

The rebate secured by former prime minister Margaret Thatcher in 1984 has climbed to seven billion euros ($6.8 billion). Asked if it was negotiable, Blair declared: “Absolutely not.”

Blair said the World Trade Organisation’s Doha round of negotiations would press for sharp agricultural subsidy cuts, something the EU would be not be able to resist without reform.

It is essential as part of that the EU is able to make an offer on reform, Blair said. These things make CAP reform inevitable.

A senior French official rejected the argument that the Doha round could force reform on Europe. Agriculture doesn’t obey the laws of the market in any country. The Americans are worse than us, the official said.

Blair did not hold his customary end-of-summit news conference, an indication that he wanted to distance himself from the outcome.

Foreign Secretary Jack Straw took his place and tried to put a positive spin on the two-day summit, saying the agreement did not preclude more meaningful reform of the CAP before 2006.

For those of us who are committed to reform of the CAP, this has been an important day’s work, he said.—Reuters