Farm Subsidies Still Snag World Trade Pact, U.S. Says : Economics: Rift with Europeans makes Yeutter ‘very pessimistic’ about reaching an agreement.

Agriculture Secretary Clayton K. Yeutter met with European Community officials Friday and emerged “very pessimistic” about the prospects for concluding an agreement to boost world trade.

“And I’m usually an optimist,” said Yeutter, in Brussels with a delegation of U.S. officials headed by Secretary of State James A. Baker III.

Baker, appearing at a news conference with Yeutter and other U.S. and European officials, dismissed a suggestion by a Soviet official in New York that opponents of Iraq’s occupation of Kuwait should try a fresh diplomatic initiative before advancing along the road to military force.

“I’m told he was speaking for himself, representing his personal views,” Baker said of Yevgeny M. Primakov, Moscow’s chief Mideast negotiator, who has been acting as Soviet President Mikhail S. Gorbachev’s special envoy on the Persian Gulf crisis.

Baker was embarking on a weekend of lobbying smaller nations to support a new U.N. resolution approving the use of force to eject Iraqi troops from Kuwait.

The endangered trade talks dominated the private session between U.S. and European officials. Four years of talks involving about 100 nations are scheduled to conclude in Brussels in three weeks.

However, a dispute between the United States and the 12 European Community nations is threatening to block an accord. U.S. negotiators are seeking reductions of 75% and more in governmental subsidies to farmers, but Europe has offered reductions of only 30%.

Other participants in Friday’s meeting expressed more optimism than Yeutter although none cited any signs of concrete progress.

“The time we spent on agriculture was useful,” said U.S. Trade Representative Carla A. Hills. “. . . We are always ready to negotiate.”

From the European side, Frans Andriessen, Hills’ counterpart as the European Community’s chief trade negotiator, conceded that “there are major problems” but said the atmosphere in the meeting was constructive.

However, Yeutter said he saw no evidence of movement by the Europeans on what he called the two central issues:

- Export subsidies. The United States has proposed that governments slash by 90% their subsidies to exporters, which Yeutter said are used to “buy foreign markets” for their farmers. Yeutter said he found no willingness among the European Community officials to dismantle their export-subsidy system.

- Market-opening measures. U.S. negotiators have sought 75% reductions in governmental subsidies to farmers who sell their products domestically. Yeutter said the Europeans showed no sign of such deep cuts in a program that, he said, closes European markets to Third World nations that have little industry and desperately need to sell their agriculture produce to Europe.

“One of the principal purposes of this exercise,” Yeutter said of the trade talks, “is to let farmers compete for markets” on an equal footing.

Agriculture is only one of 15 categories in the international trade talks, and negotiators are nearing agreement on some of the others. But officials fear that the whole package might fall apart if the United States and Europe cannot reach an agricultural accord.

On the Persian Gulf crisis, Baker told the news conference that he talked for 13 hours last week with Gorbachev and Soviet Foreign Minister Eduard A. Shevardnadze.

“Both of them pointed out,” he said, “that we have a common position on Iraq’s aggression: There should be no rewards, no partial solution--full implementation of U.N. resolutions--and no linking of the gulf with other issues.”

Primakov, in an interview with the New York Times, said an effort should be made to persuade Iraqi President Saddam Hussein to give up Kuwait peacefully in return for a promise by the major powers to promote a broader Mideast settlement, presumably meaning an end to the Arab-Israeli conflict.

He also said the U.N. Security Council should not be rushed into approving a resolution authorizing the use of force. If such a resolution is adopted, Primakov said, it should be followed immediately by an attack on Iraqi positions in Kuwait.

A senior official traveling with Baker said Thursday that the secretary will consult with five of the 10 non-permanent members of the Security Council today and Sunday in an effort to win support for a U.N. resolution authorizing the use of force.

All five permanent members--France, Britain, the Soviet Union, China and, of course, the United States--apparently favor such a move, at least tentatively. Nine affirmative votes of the 15-member Council are required for passage.

Baker also said the United States has tried to discourage well-known figures from going to Iraq to plead for the release of their countries’ hostages. Most recent among such emissaries were former West German Chancellor Willy Brandt and former British Prime Minister Edward Heath.

“We hope prominent personalities will not permit themselves to be used (by Iraq) in order to send confusing and mixed messages to the world about the (anti-Iraq) coalition’s unity and resolve,” Baker said.

In New York, diplomats at the United Nations said Baker recently discussed with Canadian officials the possibility of the United States organizing a foreign ministers meeting of Security Council members to underscore the importance of the resolution authorizing the use of force against Iraq, if it is voted.

Such a meeting, at which the foreign ministers would cast their nations’ ballots, could give the resolution more authority, some ambassadors believe. Nations are normally represented by their U.N. ambassadors.

“The Americans . . . .may wish to underline, stress the importance of the meeting by having it at the ministerial level,” said Canadian Ambassador Yves Fortier.

At the moment, there are no drafts of a use of force resolution being circulated. But diplomats have been considering outside of council chambers a number of paragraphs that eventually could end up in drafts of such a resolution.

Times staff writer John Goldman, at the United Nations, contributed to this story.