U.S. Seeks Farm Subsidy Accord by December : EEC Minister Voices Objection to Proposal

The top U.S. trade envoy called Sunday for a framework agreement by December to end the global farm subsidy war, but the European Common Market’s trade minister maintained his group’s objections to such proposals.

Following weekend talks with his counterparts from the European Community, Japan and Canada, U.S. Trade Representative Clayton K. Yeutter said there was no justification for industrialized countries to continue subsidizing exports of farm products or other goods.

But Yeutter also told a news conference following the ministerial retreat on Quadra Island near Vancouver that the meeting had seen little progress in resolving the issue.

The retreat was one of two weekend Quadrilateral Trade Meetings held each year. The next is scheduled for Gull Lake, Minn., on June 22-24.

Realistically, Yeutter said, the Reagan Administration would like an outline agreement by December on eliminating farm subsidies within the 95-nation General Agreement on Tariffs on Trade.

Called Unreasonable

The GATT agreement is being renegotiated in a round of talks launched in September, 1986, in Punta del Este, Uruguay. A crucial midterm meeting of all members is scheduled in Montreal next December.

The United States has proposed phasing out farm subsidies that create export surpluses by the year 2000.

Yeutter acknowledged that the 12-nation European Community--whose subsidy-heavy budget is dominated by its farm program--considered the target unrealistic and said he was willing to look at a longer time frame.

“But let’s not conclude that it’s impossible to rid the world of these onerous practices,” he said.

European Community Trade Commissioner Willy de Cler said the EEC already had adopted a policy of curbing farm production. But he described the U.S. proposal as unreasonable and accused the United States of preaching free trade while practicing intervention.

“Both of us spend about $30 billion (a year) to support farming,” de Cler said. “There are about 2.5 to 3 million farmers in the United States and 12 million in the European Community. It’s not difficult to draw the conclusion which farmers are more supported.”

He cited a recent increase in the U.S. export enhancement program under which nearly 12 million tons of cut-price wheat was sold to the Soviet Union in the past year.

De Cler said the EEC was willing to negotiate on farm subsidies, but only as part of a balanced “global package” covering areas such as investment, services and improved access for products from tropical Third World countries.

Cannot Compete

Canadian trade minister John Crosbie said he hoped for an agreement by December to at least freeze farm subsidies at current levels.

Canada and the Cairns group of grain exporters that include Australia say they have been victimized by the subsidy war because their treasuries cannot compete with the U.S. and EEC giants.

The issue will be in the spotlight throughout the year, including next month’s Organization for Economic Cooperation and Development meeting in Paris.

Both de Cler and Hajime Tamure, the Japanese trade minister, said they welcomed the U.S.-Canada Free Trade Agreement negotiated last year, but yet to be ratified, as a symbol of more open world trading.