Germany Eases Its Position on Farm Subsidies : Trade: The action raises hopes of a breakthrough in a dispute that has clouded U.S.-European relations and stalled global talks to cut barriers.

An apparent softening in German support for large European Community agricultural subsidies has raised hopes of a possible breakthrough in a trade dispute that has clouded U.S.-EC relations for years and stalled global negotiations to reduce trade barriers.

The German shift reportedly came during a Cabinet meeting last month when Chancellor Helmut Kohl argued strongly for a policy that would commit the community to easing its hard line on keeping the subsidies.

“The Cabinet called for binding commitments on farm subsidies that could achieve a breakthrough in negotiations,” said Joachim Romers, spokesman at the German Economic Ministry in Bonn.

While Germany is not a direct participant in the global trade talks, it is both the largest and richest of the 12-nation EC, which is negotiating on behalf of its member states.

Its position is also crucial because, along with France and Ireland, it is one of three EC countries that have ardently resisted American-led efforts to reduce EC farm subsidies, claiming that such a move would effectively destroy a way of life in their countries.

Together, the three states have constituted a blocking minority on the issue within the EC as it has tried to negotiate a highly complicated reduction of trade barriers with its global trading partners.

Farm lobbies in all three countries are extremely powerful and have so far been successful in defending the supports, which this year amount to $38 billion, or about 53% of the community’s total budget.

The United States argues that these subsidies prop up an inefficient agricultural sector, block access to European markets and generally warp trade patterns, giving unfair advantage globally to Western Europe, one of the world’s richest regions.

The Bush Administration has made a substantial reduction of EC agricultural subsidies a make-or-break issue in a successful conclusion to the present global negotiations, known as the Uruguay Round. The talks involve 108 nations under the auspices of the General Agreement on Tariffs and Trade.

Because of the highly sensitive political nature of farm subsidies, the German move came in the form of a little-publicized statement of general support for a GATT agreement rather than as a package of detailed proposals.

Indeed, Erwin Reuss, spokesman for German Agriculture Minister Ignaz Kiechle, claimed that the Kohl Cabinet statement represented no major change.

“No concrete measures were discussed at all,” he said Wednesday.

Western diplomats monitoring the issue, however, believe that a shift has occurred.

“There has been a change in the German position, and it is definitely something that we take seriously,” commented a Bonn-based envoy. “It’s opened the door to movement.”

German government officials said they expected France too would soon indicate its willingness to compromise in order save the Uruguay Round from collapse.

So far, however, no formal new EC offer has yet to appear, and one is not expected in the coming weeks.

Germany’s apparent shift is said to stem partly from Kohl’s personal assessment that his country, as one of the world’s largest trading nations, would suffer disproportionately if the GATT negotiations collapsed, and partly from his government’s post-unification drive to reduce subsidies in order to finance the reconstruction of the former communist east.

“It has to be seen in this overall context,” Romers said.