U.S., Europe Shun Trade Compromise : Farm Subsidies Still a Sticking Point as 96-Nation Meeting Opens

Trade ministers from around the world began preliminary wrangling Sunday in advance of a four-day assessment session this week on global trade liberalization efforts, but they remained far apart on several key issues, including how much to reduce global farm subsidies.

After a day of private, small-group meetings, the ministers--representing the United States and 95 other countries--reported no breakthroughs. The current impasses involve proposals to extend existing trade rules to cover agriculture, services and intellectual property--the three major agenda items in the negotiations.

If anything, the United States and the 12-nation European Communities, which are at odds over the agriculture issue, appeared to cling more firmly to their previous positions. Frans Andriessen, the Common Market’s agriculture minister, warned that “we are not prepared to discuss the complete elimination of agricultural supports, such as the U.S. and some other countries” are advocating.

Lobbying by Senators

At the same time, U.S. officials sought to intensify the political pressure on the agriculture issue. They dispatched U.S. senators and congressmen who are attending the meeting here to warn other delegations that Capitol Hill may react sharply if other countries do not go along with American demands that the world’s trading nations eliminate all farm subsidies and agricultural trade barriers over the coming decades.

The continuing impasse between the United States and the European Communities has begun to draw criticism from other delegations.

Australian Trade Minister Michael J. Duffy, a strong proponent of the U.S. agricultural proposal, criticized both sides Sunday for being intransigent and warned that failure to hammer out an accord on agriculture could sour negotiations on other issues. “The blame for this can be shared by the U.S. and the EC, who in a perfect world deserve each other,” Duffy rasped.

Canadian Trade Minister John Crosbie, whose country has been one of the foremost proponents of the U.S. position, called Washington’s stand on agriculture “extreme” and urged the U.S. and the European Communities to show flexibility. If both sides stick to their positions, “obviously there can be no agreement,” he said.

This week’s talks are being billed as a mid-term review, a sort of stock-taking session in the four-year-long “Uruguay Round,” the global trade-liberalization talks that began in the autumn of 1986 and are scheduled to end in 1990.

U.S. officials initially hoped the meeting in Montreal could provide fresh impetus for the slow-going talks and set a timetable and agenda for the final two years of negotiations. More recently, they seem to have become resigned to the notion that the real bargaining may not come until close to the 1990 deadline.

However, this week’s session is expected to produce significant progress on some, mostly narrower-interest issues.

The talks are being held under the aegis of the Geneva-based General Agreement on Tariffs and Trade, a 96-country compact that administers the current world trading system. A special GATT panel Sunday unveiled a formal report on the status of the negotiations on the agricultural talks, but it stopped short of taking a position on the key question of whether the agricultural barriers should be phased out entirely, as the United States wants, or merely reduced, as the Europeans are insisting.

U.S. officials have warned they will walk away from the Montreal meeting without any agreement rather than accede to watered-down language on agriculture and the other big issues. If that happens, the negotiations presumably would continue to 1990, but the past two years’ momentum could be severely blunted.