Thorny Issues, Frozen Positions : * Summit Asymmetry Over Ecology, Agriculture: Let’s Make a Deal

When the 16th annual economic summit convenes in Houston on Monday, President Bush and heads of six other leading industrialized nations will gather with the usual pomp and circumstance. But behind their camera-happy smiles will be real tension on one issue in particular: agriculture.

Bush hopes to coax a commitment out of the leaders of Britain, Canada, France, Italy, Japan and West Germany to eliminate most farm subsidies. That will be a tough sell indeed because France, Italy, West Germany and Britain all oppose any tinkering with their domestic farm policies. Canada supports the U.S. position and so does Japan, which nevertheless wants to keep its own domestic rice market off-limits.

Bush is right in wanting agriculture to be part of the summit’s final communique. Phasing out Europe’s annual $9 billion in farm export subsidies would help make U.S. farmers, who receive less than $1 billion in subsidies, more competitive.

Hard U.S. bargaining is expected at the summit. A lack of consensus on the agricultural issue has stalled the current round of multilateral trade talks. Bush has maintained repeatedly that agricultural trade reform is crucial to ending the General Agreement on Tariffs and Trade talks by December.

Agriculture is one of the most contentious trade issues because domestic farm policies, such as subsidies, are designed to support and protect home markets. But in the process world prices and markets get wildly distorted. It was not until the 1986 summit that the seven nations agreed to place the farm issue prominently on their agenda.

In addition to agriculture, Soviet aid and the environment are on the Houston agenda. France and West Germany are seeking $15 billion in aid to the Soviet Union, but the United States understandably wants to wait until the Soviets commit to a more market-oriented economy. Meanwhile, the United States, hiding behind a purported lack of scientific evidence, stands alone in its reluctance to agree on steps to curb carbon dioxide emissions that contribute to global warming.

If the Bush Administration wants the Europeans to abandon their provincialism on agricultural issues, the Europeans will insist on environmental reciprocity. Quite rightly.