U.S., EEC Officials Meet Over Farm Subsidy Disagreements

Top American trade negotiators met Friday with officials of the European Economic Community for a series of talks expected to focus on the contentious issue of farm subsidies.

Agriculture Secretary Clayton Yeutter and Trade Representative Carla Hills were greeted by Frans Andriessen, the top foreign affairs official of the 12-nation trading bloc, at the start of two days of talks.

Ray MacSharry, the community’s agriculture chief, was also scheduled to take part in discussions at the Common Market’s headquarters in Brussels.

The four officials held a round of get-acquainted talks in February in Washington during which they agreed to set up a task force to try to resolve a dispute over a European ban on imports of hormone-treated meat from the United States. The task force has until early May to complete its findings.

At this session, the officials were expected to discuss ways to try to ease a conflict between the United States and the Common Market over government subsidies to farmers. The dispute has stalled international trade negotiations, known as the Uruguay Round.

Andriessen said last month that the United States offered a new proposal on the issue, but he gave no details.

Find Common Ground

The two sides are attempting to find common ground before further Uruguay Round discussions take place April 5 in Geneva. The talks are being held under the auspices of the 96-nation General Agreement on Tariffs and Trade.

The United States wants the Common Market to end import barriers and export and domestic farm subsidies that it says distort trade. It initially demanded that the subsidies be eliminated by the year 2000 but has since said the date is negotiable.

The community has refused to agree on a date for withdrawing all supports and instead has insisted that the two sides discuss only short- and medium-term reform measures.

The Common Market provides hefty subsidies to its 18 million farmers through guaranteed prices for many of their crops. It also gives exporters help so that costlier European farm products can compete with lower world prices.

The United States complains that the export subsidies have helped the Europeans increase their share of the world market. It has responded by setting up its own Export Enhancement Program.

A year ago, European leaders began the politically sensitive task of curbing farm payments. They agreed to limit the maximum annual amount of expenditure on price guarantees over five years. U.S. officials say the measures were not enough to fix a fundamentally flawed policy.

Smaller Farms

Europeans argue that they cannot leave the bulk of their farmers to compete without help in the world market. Their farms, they say, are on average smaller than in the United States and need extra aid.

On the hormone issue, U.S. and EEC officials set a 75-day cooling-off period, beginning in mid-February, so that the task force could find ways for American producers to export hormone-free beef to Europe.

The Common Market on Jan. 1 imposed a ban on imports of meat from cattle treated with growth hormones. The United States refused to comply and instead slapped stiff duties on a variety of European products.

The Europeans have threatened to impose their own retaliatory measures--tough tariffs on American walnuts and dried fruit--if the conflict isn’t resolved.

The hormone ban was imposed because of European concerns that the stimulants pose a health risk to consumers, a claim that the United States disputes.

The ban is expected to block imports of about $100 million worth of beef and beef byproducts from the United States. The trading partners totaled about $165 billion worth of trade in 1988.