BRITAIN and the US should spearhead a new transatlantic alliance for prosperity by breaking down trade barriers, Chancellor Gordon Brown has said.

The head of the Treasury told the US Council of Foreign Relations Transatlantic Taskforce that removing barriers could create one million jobs in Europe and boost growth by up to one per cent.

Speaking in New York, Mr Brown also said that in the run-up to World Trade Organisation talks in Cancun, Mexico, in September, the two countries had to take the lead in a "common agenda to break the deadlock in world trade".

Developing countries could benefit by up to £150bn a year, he said, with benefits for the developed word as well.

Pointing out the massive growth in trade between the US and Europe, he said: "Europe and America have a vital interest in each other's economic prosperity. So this is the right time for a new era of engagement between America and Europe.

"Instead of seeing globalisation as inviting a weakening of transatlantic ties, we must strengthen them to create a new transatlantic alliance for prosperity that is in both our interests."

He set out a four point action plan, including the production of a joint US/EU analysis of where the barriers to trade across the Atlantic lie and a more pro-active approach to removing them.