U.S. Tries Bold Tack to Spur Agriculture Trade Talks : Trade: America proposes slashing nearly all barriers to create a more market-oriented system. A showdown with Europe may result.

The Bush Administration, frustrated by continued European intransigence over cutting costly farm subsidies, Monday launched a go-for-broke bargaining strategy aimed at breaking the deadlock on agriculture that is imperiling the crucial global trade negotiations.

At a briefing for reporters, U.S. Trade Representative Carla Anderson Hills formally unveiled a new U.S. proposal that would slash practically all barriers to agricultural trade around the world.

The proposal, admittedly bold and far more ambitious than Europe’s expected counteroffer, is designed to jolt the stalled agricultural negotiations and to set the stage for a showdown in December, when bargaining enters its final stage.

All sides agree that the farm impasse is the key obstacle to achieving success in the broader trade talks.

Without a breakthrough on cutting farm subsidies and textile quotas in major industrial countries, developing nations will refuse to accept U.S. efforts to open up markets to services and investment and to provide patent and copyright protection to Western products.

Hills, in announcing the far-reaching American proposal, insisted that the Bush Administration cannot settle for just token progress in liberalizing trade.

“Of course those with trade protections hate to give them up,” she said. “But the time of the ‘Me Generation’ has got to come to an end.”

The U.S. proposal calls for all countries to commit themselves to deep reductions in agricultural export subsidies, import barriers and domestic price supports over a 10-year period. The plan, which would also require Japan to open itself to rice imports for the first time, is aimed at slashing export subsidies by 90% and reducing other farm trade barriers by 75%.

By allowing countries a decade to adapt to a new system, Hills said, farmers are “not going to be thrown in the cold overnight.”

American trade negotiators contend that European Community farm officials are the key obstacle to reaching a trade agreement. EC Farm Commissioner Ray MacSharry’s proposal to reduce overall subsidies a bare 30% is in the final stages of being adopted as the official negotiating position of the 12-nation community.

But the MacSharry plan, one U.S. official contended, would be practically useless in reducing trade barriers.

“It’s like Saddam Hussein saying: ‘Let’s talk about peace’. . . . What we’re dealing with,” he declared, “is Saddam MacSharry.”

EC officials did not have any immediate response to the U.S. proposal, which was officially presented Monday by negotiators in Geneva. While MacSharry’s plan has been criticized by some European officials as not going far enough, he has defended it as far more politically feasible than the U.S. position.

The EC proposal “strikes a careful balance between the needs of the community’s farmers and the community’s desire to see a successful and well-balanced outcome to the Uruguay Round,” MacSharry said earlier this month.

Under the EC proposal, overall farm subsidies would fall just 30% from the average established in 1986, when the trade talks first got under way in Uruguay. The goal of European negotiators is to ease the tax burden of subsidizing agriculture without imposing a hardship on Europe’s 10 million farmers, the backbone of Europe’s prized rural landscape.

The EC plan, which would not impose any special limits on its export subsidies, would require only modest changes in Europe’s highly expensive system of farm supports. Moreover, European negotiators are insisting that they be allowed to compensate for cuts in certain cereal subsidies by boosting tariffs on cereal substitutes.

The Bush Administration proposal, in contrast to the European plan, envisions fundamental reform in the decades-old system of farm supports that has propped up domestic prices and led to frequent bouts of production surpluses. According to one authoritative study, the major industrial nations waste an estimated $250 billion a year in higher food prices and government subsidies for farmers.

The U.S. plan would create a more market-oriented system that would benefit the most efficient farmers around the world, including those in the Midwest farm belt and major producers in such countries as Australia, Argentina, Canada and New Zealand.

The overall goal of the General Agreement on Tariff and Trade negotiations, which are scheduled to conclude in Brussels in December, is to establish a new set of international rules covering such previously exempt categories as services, protection of intellectual property and investment.

It is also probably the last chance for trade officials to extend GATT to agriculture and textiles--issues that have repeatedly stymied efforts to reverse the protectionism that holds back poorer nations from gaining a stronger foothold in the global economy.