96 Nations Break Impasse on Farm Trade, Subsidies

The United States and 95 other countries agreed Friday to negotiate “a substantial, progressive reduction” in agricultural trade barriers and farm subsidies around the world, breaking an impasse that has stalled global trade liberalization talks for months.

Although the accord, hammered out in Geneva, does not go as far as Washington had hoped, it nevertheless provides the basis for including farm trade under international trade guidelines for the first time.

The framework for negotiating a reduction in agricultural subsidies clears the way for serious negotiations on a variety of other trade issues on what is proving to be the most far-reaching and comprehensive round of trade-liberalization talks in postwar history.

Besides the talks on agriculture, the negotiations will also seek to extend current trade rules to cover such areas as services, investment and intellectual property--patents, copyrights and trademarks--which have not been governed by global trading rules.

Completion of the accord on agriculture depended on resolution of several side issues in a marathon bargaining session that extended well into the night. Formal approval of the entire trade package was expected today.

The talks, known formally as the Uruguay Round of trade liberalization negotiations, are being held under the aegis of the Geneva-based General Agreement on Tariffs and Trade, the 96-country compact that sets and enforces global trade rules. Negotiators hope to conclude the entire Uruguay Round by the end of next year.

The United States has been pushing for the negotiations since 1982 but did not win formal approval even to launch the talks until 1986. The first two years of the talks were aimed at setting the terms of negotiations that would proceed in 1989 and 1990. However, a review session in Montreal last December broke up in disarray after U.S. and European differences prevented a compromise on the key agricultural issue.

Washington had insisted that negotiators be given a mandate to eliminate farm subsidies and agricultural trade barriers by the year 2000. But European negotiators, rejecting that as unrealistic, called instead for a freeze and eventual rollback of farm subsidies, which governments pay producers of certain agricultural goods.

Freezes Barriers

Friday’s agreement combines elements of both approaches. It calls for imposing an immediate freeze--and, where possible, some rollbacks--of current farm barriers and for negotiating “a substantial, progressive reduction” over several years in trade-distorting farm subsidies, both government support payments designed to subsidize exports as well those that spur production.

Despite that, said U.S. Trade Representative Carla Anderson Hills, the United States has not given up its push to eliminate farm subsidies by a specified date. Hills remained in Washington during this week’s talks while aides represented the United States at the Geneva negotiations.

The agreement on agriculture contains several important procedural mandates that the United States had sought.

It requires that member countries convert current import quotas to tariffs, which are easier for negotiators to pare back. And it calls on negotiators to aim both to provide wider access for agricultural imports in each of the 96 countries.

Even so, the accord is likely to prove controversial among farmers, both abroad and in the United States. The Bush Administration has maintained that paring back subsidies and barriers would help American farmers by eliminating unfair competition, but some Democrats disagree.

Dixon Terry, an Iowa diary farmer who is president of the National Family Farm Coalition, a left-of-center farm group, charged that the Administration “now seems ready to sell us out” over the subsidy issue. Terry wants Washington to limit production here instead.

Two-Stage Timetable

Friday’s accord sets a two-stage timetable for the coming farm talks.

First, the negotiating countries must move immediately to freeze current farm subsidies and trade barriers and--if possible--roll some of them back by October, 1989. It also calls on negotiators to provide detailed proposals by December for converting farm trade barriers into tariffs, reducing government subsidies and other items on the agenda.

Then, in late 1990, negotiators are to decide which reforms to adopt and when to put them into effect.

Along with the mandate to reduce import barriers and subsidies, the accord also sets the goal of coordinating food sanitation and quality regulations around the globe. The United States has charged that Europe has used health standards for beef hormones as disguised trade barriers.

The accord also includes provisions to guarantee special treatment to developing countries. And it would allow countries that face potential food shortages--as Japan would if it ran out of rice--to accumulate huge stocks.