European Community Sets Harder Tone on Farm Issues : Trade: Reversing a conciliatory stance, EC officials vow to yield nothing in talks with U.S.

After raising hopes for a breakthrough in world trade talks, the European Community on Friday reverted to tough rhetoric ahead of important weekend talks with senior U.S. officials.

EC Farm Commissioner Ray MacSharry took a firm stance Friday on the agricultural issues outstanding in the talks. He also raised the specter of damaging trade wars with the United States and said President Bush was trying to block progress.

He was joined in his harsh comments by French Agriculture Minister Jean-Pierre Soisson, who tried to persuade the EC Commission not to yield anything to the Bush Administration this weekend.

Soisson said he gave the commission, which negotiates for the 12 member states, a message from Premier Pierre Beregovoy “affirming that the French government would firmly oppose, with all the means at its disposal, the conclusion of accords contrary to the interests of our agricultural sector.”

The United States has maintained that far-reaching cuts in EC farm subsidies were essential to reach a trade pact. French farmers have been the most vocal in opposing the cuts.

Friday’s comments were in sharp contrast with earlier EC statements that indicated the trade bloc was willing to go far in give-and-take talks in a last-ditch effort to save the negotiations.

The 6-year-old negotiations, sponsored by the General Agreement on Tariffs and Trade, should have concluded two years ago, but disputes over EC farm subsidies postponed the outcome.

Pressured by a world economy in decline, plummeting stock markets and monetary chaos in Europe, EC and U.S. officials have come closer to concluding a transatlantic deal, partly because a GATT accord could inject up to $190 billion into the global economy, officials said.

They said the GATT talks could be resolved before the U.S. elections Nov. 3, but if no progress is made, the talks could be sidelined for possibly years.

EC Trade Commissioner Frans Andriessen will meet with U.S. Trade Representative Carla Anderson Hills, while MacSharry will have talks with U.S. counterpart Ed Madigan to seek a breakthrough this weekend.

No details were available on when and where the officials would meet. Apart from farming, the negotiators will also discuss market access and the service industries, where problems also remain.

Apart from the GATT talks, the officials will discuss a dispute over oil-producing seeds, such as soybeans, that could bar overall progress.

In a speech to the U.S. Chamber of Commerce in Dublin on Friday, MacSharry warned that the EC would retaliate if the U.S. fulfilled its threat of punitive U.S. duties on EC goods over oil-seed aid.

The U.S. demand that the EC cut its oil-seed production to 7 million tons a year from about 13 million tons is “absolutely impossible,” MacSharry said.

“If the U.S. were to actually introduce retaliation measures, the European Community would have to respond in kind,” he said.

Bush’s decision last month to boost cereal export subsidies by $1 billion also cast a cloud over the outcome of the talks, MacSharry said.

MacSharry also said he would protect compensation for EC farmers for production cuts and price reductions. He said U.S. demands to cut them were “out of the question.”

The remarks contrasted sharply with comments made Tuesday after the EC Foreign Trade ministers meeting in Luxembourg, where German Economics Minister Juergen Moellemann said “the commission should be capable of taking certain risks now.”