Bush Eases Stance on Cuts in Farm Subsidies : Trade: The issue has stalled international talks in Brussels. The President’s move is endorsed by his host in Uruguay, the second stop on a South American tour.

President Bush on Tuesday relaxed his insistence on deep cuts in agricultural subsidies, an issue that has stalled international trade talks under way in Brussels.

The United States previously has insisted on cuts of 90% in export subsidies and 75% in other farm supports.

But Bush, visiting South America, was asked Tuesday whether he would settle for something less. “We are not locked on a specific figure,” he said. “We are locked on the fact that there has to be inclusion of all categories.”

The U.S. proposal for heavy cuts in subsidies, made at talks on the General Agreement on Tariffs and Trade, the 105-nation organization seeking to find ways to cut trade barriers and liberalize global trade, had left a large gap between Washington’s position and a much-less-severe cut of 30% proposed by the European Community.

The President’s step back from insistence that deep cuts in subsidies to farmers and other food producers be part of the trade talks could bring a breakthrough in the stymied negotiations in Brussels.

“It’s definitely a signal,” one White House official said.

Another U.S. official said it was the first time Bush had suggested he might soften his position against farm subsidies. But the official said it is not yet clear what percentage cut Bush would accept.

The question goes beyond what assistance governments will give their farmers in an effort to keep agriculture profitable by protecting it from low-priced competition.

Subsidies absorb millions of dollars in taxes and are blamed for helping add to prices consumers pay.

Bush was given a vote of confidence in his approach by President Luis Alberto Lacalle, his host during an overnight stop in Uruguay, the second country Bush is visiting on a five-nation, weeklong tour of South America.

“This agriculture policy has hurt millions of people two ways: through subsidies that go into our own markets and compete against the products of the agricultural countries and, at the same time, through protectionist barriers that don’t open the markets of certain very wealthy parts of the world to us, the farmers of the world,” Lacalle said.

Three weeks ago, Bush sharply attacked the European proposal in a meeting at the White House with the heads of the 12-nation European Common Market.

In a speech Tuesday to the Uruguayan Congress, Bush said a successful conclusion of the trade talks, known as the Uruguay Round because they were begun in 1986 in the Uruguayan resort city of Punta del Este, “presents us an extraordinary opportunity for unparalleled economic growth for all nations, well into the 21st Century.”

Referring to the final talks this week in Brussels, the President said, “We stand firmly with you and other Latin nations in insisting that countries sharply reduce the agricultural subsidies that distort world trade.

“The land has historically been at the heart of both our economies, and from Montevideo to Montana, our farmers and our ranchers enjoyed shared traditions, shared interests and shared concerns,” he said.

In a message he said was directed at the contentious negotiations, Bush said the talks began with a commitment to expanded world trade.

“Let us finish the round in the same spirit,” he said, with a pointed call to open “Europe’s market to this hemisphere’s agricultural products.”

Bush met with Lacalle in the Uruguayan president’s seventh-floor offices in Edificio Libertad (Liberty House), a 5-year-old ultramodern structure that resembles, from the outside, a suburban hospital as much as it does a seat of government.

Against this background, soldiers stand guard, decked out in plumed hats, black boots and red-white-and-blue uniforms and carrying gleaming swords.

Uruguay, slightly smaller than Oklahoma and home to 3.1 million people, is the second-smallest nation in South America. Like many of its neighbors, it has had a checkered history of civilian and military governments.

Lacalle, 49, is the second elected president since the military gave up its rule in 1984, and the first elected in free voting since 1971. He took office March 1.

As his 40-vehicle motorcade moved through Montevideo, Bush was greeted by thick crowds, some giving friendly waves, but others holding up a sign saying “Bush Pig” and giving him a thumbs-down gesture.

Despite inflation of 80.4% last year, Uruguay has managed to keep up payments on its foreign debt, one of the hemisphere’s highest on a per-capita basis. Lacalle hopes that this behavior will be rewarded by a relaxed debt restructuring, and he told reporters recently: “Let me believe that it pays to pay.”

Uruguay, in which 90% of the land is given to crops and raising sheep and cattle, depends heavily on neighboring Argentina and Brazil, as well as on U.S. and European markets, to buy its agricultural exports. It has much to gain from the free-trade policies of Bush’s proposed Enterprise for the Americas initiative.

Their similar views favoring reduced agricultural subsidies have made Bush and Lacalle natural allies in the closing stages of the Brussels negotiations.

Lacalle, like others on the continent, has tried to use free-market principles--favored by Bush--to bring down Uruguay’s budget deficit, which has been fueled for years by the most elaborate welfare system in South America.

The Uruguayan president is also seeking to change the extensive system of public employment, in which one-third of the work force is employed by state-run enterprises. This switch to the private sector, according to a State Department briefing paper, faces opposition from an overwhelming majority. Bush voiced support, in the speech to the Uruguayan Congress, for the efforts to restructure the economy.