Cracks in EC’s Iron Curtain : It’s America’s move now as Europeans reduce agricultural subsidies

The European Community’s move to make significant changes in its farm policy is to be applauded and encouraged. It may be precisely the action needed to break the deadlock in world trade negotiations, now in their sixth year. U.S. Trade Representative Carla A. Hills has long maintained that the EC’s stubbornness on agriculture reform has blocked a successful conclusion of the multilateral trade talks, known as the Uruguay Round.

After four days of nearly continuous talks, the 12 members agreed to revamp the EC’s Common Agricultural Policy, a 30-year-old program conceived to avoid food shortages. Even Germany and France, the most ardent opponents of farm reforms, backed the changes, which include a 29% cut in prices that farmers are guaranteed for their cereal crops over three years and a shift from price supports to direct income supplements to farmers for removing land from cultivation.

The subsidy change would bring EC food prices down to world levels, reduce vast surpluses and lower retail food prices. Thus, the community’s 10 million farmers are expected to angrily oppose the change.

U.S. enthusiasm for the EC’s initiative has been guarded so far because officials have not had a chance to study the details. Of particular concern is that the EC’s reforms might fail to address the issues of farm export subsidies and market access.

Still, the EC’s efforts mark some progress and are a welcomed whiff of cooperation. U.S. and EC trade negotiators are scheduled to meet next week in Washington. The EC has made its move to break the stalemate over agriculture. Now it’s up to the United States to show good faith.