TRADE : Optimistic Signs as GATT Deadline Nears : Uruguay Round: French raise the possibility of compromise in the long-stalled talks on lifting protectionist barriers.

After a three-year deep freeze, negotiations to change the rules governing world trade are suddenly showing signs of life two weeks before what is widely considered a final deadline.

The French government, which has blocked an agreement on agricultural issues for more than a year, has now raised the possibility of compromise. The chief international referee of the talks stepped up pressure on the United States Tuesday to respond positively, and U.S. officials signaled a willingness to do so.

While no one is ready to predict yet that the most intractable obstacles are about to be lifted, participants in the talks said that a resolution is possible.

The so-called Uruguay Round talks, which began in Punta del Este, Uruguay, in September, 1986, and have been conducted fitfully ever since, are now proceeding at a nearly nonstop pace, with key officials flying back and forth across the Atlantic and sending signals in private conversations and back-to-back news conferences.

The next, crucial steps could occur today or Thursday in Brussels, when U.S. Trade Representative Mickey Kantor meets with the chief European negotiator, Leon Brittan, the European Community’s commissioner for external affairs. Kantor will be joined by Secretary of State Warren Christopher and Agriculture Secretary Mike Espy.

“We’re at an absolutely crucial moment, with very few moments left before the end of the round,” said Peter Sutherland, director general of the General Agreement on Tariffs and Trade. “The 15th of December is the deadline of all deadlines and it won’t be extended.”

Suggestions by French Prime Minister Edouard Balladur of a French readiness to compromise on the politically sensitive agricultural issues, Sutherland said, are “positive and constructive.” Now, he added, it is time for the United States to become engaged “in constructive dialogue.”

Sutherland spoke by telephone from Geneva with reporters in Washington, shortly after conferring by telephone with Kantor, and moments after Kantor conducted the first of two news conferences in Washington.

The flurry of activity occurred one day after Balladur, in an interview in Paris with the Washington Post, insisted that, while France’s interests must be protected, his government is ready to seek a compromise.

While the issues in dispute may appear arcane, the impact of success or failure is no mystery, in the view of participants in the talks. The relaxed trading rules that are the goal of the negotiations could add billions of dollars each year to the suffering global economy, they say, while collapse of the talks could bring protectionist practices that would stifle a struggling recovery.

At the heart of the agricultural dispute is an agreement, reached at Blair House in Washington in November, 1992, under which the European Community nations would reduce by 21% the subsidies they grant to production of crops for export. France, a member of the community, has sought to modify the reduction or stretch it out, and the United States has insisted that it will not renegotiate the accord. The subsidies now give French and other European farmers a price advantage in competition with other agricultural exporters.

Suggesting a readiness to paper over some differences, Espy told reporters Tuesday: “I think it could be a question of semantics.”

Whether the subsidies are cut at the beginning or end of the agreement, “as long as you know you reach the same point together--these are things we must discuss,” he said.

In a related arena, U.S. and Japanese negotiators have overcome longstanding differences and are likely to announce agreement next week on a plan under which Japan--which has traditionally banned the import of rice--gradually will import up to 8% of the rice it consumes.

But even if the difficult agriculture obstacles can be overcome, several others--among them those involving tariffs on textiles, the access of foreign banks and insurance companies to domestic markets, provisions regulating the below-market pricing of exports, or “dumping,” and rules governing support for French film and television production--remain far from resolution, U.S. and European officials said.

The so-called cultural issues, negotiated under the heading of “audiovisual,” represent “a critical area for us,” Kantor said. Still, he said, “there is currently great room for maneuverability in this area.”

But even as they voiced a degree of optimism Tuesday that had been missing in recent months, Kantor and Sutherland in their separate conferences with reporters emphasized the difficulty of the road they must travel over the next two weeks if the seven years of haggling are to be brought to a successful conclusion.

For his part, Kantor said that the United States is unwilling to relax any of the trade laws, popular with Congress, that are intended to pry open foreign markets.

And Sutherland said that, while “there is an increasing belief the round . . . will be concluded successfully,” severe obstacles remain.

GATT Speak GATT has spawned a language of its own. A glossary of the essential terms:

* GATT: The General Agreement on Tariffs and Trade, although critics describe it as the General Agreement to Talk and Talk.

* Uruguay Round: Not a children’s game, but the current set of talks aimed at cutting barriers to exports. Got its name because negotiations began at a Uruguayan resort in 1986.

* Tariffication: A true gift to the English language, it refers to the plan to completely end import bans on farm products, replacing them with customs tariffs. National pride--and the national dish--is at stake in Japan and South Korea, which are fighting to keep their prohibitions on rice imports.

* Anti-dumping duties: No connection to garbage recycling but a tax to stop other countries from selling goods abroad for less money than the price at home.

* Multi-Fiber Arrangement: Not a plan for healthful eating but a system of quotas to limit the import of textiles from poor countries to rich ones. GATT wants to phase this out.

* Audiovisual services: Monty Python versus Mickey Mouse. Europe wants to keep limits on the amount of foreign films and television programs that can be screened. Hollywood is furious.

* DFA: Draft Final Act. A 450-page document prepared two years ago with all the planned rules and liberalizing agreements. Gathered dust since then waiting for the final curtain to fall.

* MTO: Multilateral Trade Organization. A bigger, better, bolder GATT to implement the Uruguay Round.

Source: Associated Press