Confident Brown urges trade deal

The Prime Minister said he thought it may be possible to reach agreement early next year on the stalled World Trade Organisation negotiations, following talks with fellow Commonwealth leaders at their summit in the Ugandan capital, Kampala.

Mr Brown also forecast an American economic downturn early next year but said he believed the British economy was robust enough to withstand it because of measures the Government had taken.

Mr Brown told reporters: "One of the central issues we have been discussing is the global economy and the future of the trade talks and how we can respond better to the financial turbulence that has been seen over the last few weeks and months and how we can see if there are improvements we can make to how international institutions deal with events."

The Prime Minister said he wanted to see a more effective international "early warning" system to head off events such as the recent credit crunch caused by the American sub-prime market crisis.

On the trade talks, Mr Brown had a private meeting this morning with India's Premier, Manmohan Singh - seen as one of the key players - and told reporters: "What divides the different groupings is small enough for there to be a realistic prospect of there being a trade deal.

"My view is that it is possible to see over the next few weeks - probably during January - tariff reductions in Europe, subsidy reductions from the USA, progress in access to manufacturing goods from Brazil and progress generally with some sensitivity to the interests of the poorest farmers around the world."

He also promised the UK would commit "substantial resources" to so-called aid for trade projects which help developing countries build an effective infrastructure to help move their goods to the international market.

Speaking about recent financial turbulence, Mr Brown said: "We have had the impact of that in the Northern Rock problems we have seen in the last two months.

"What's increasingly clear is that each country over these next few weeks and months has got to steer a course of stability in what are uncertain world conditions."