Another GATT Roadblock : Trade: Despite a U.S.-EC agreement on agriculture, differences on entertainment royalties and aircraft subsidies threaten the negotiations as Dec. 15 deadline looms.

The United States and the 12-nation European Community apparently resolved longstanding differences on agricultural exports Tuesday, but any celebration was dampened by failure to reach the overall accord desperately needed to pave the way for a global trade agreement.

Emerging exhausted from a 23-hour negotiating session, U.S. Trade Representative Mickey Kantor told reporters that talks had come close to overall agreement but ran aground on two issues: European aircraft subsidies and entertainment industry royalties.

Despite their failure to reach total agreement, Kantor and his EC counterpart, Leon Brittan, flew to Geneva to meet with the officials in charge of world trade talks being conducted under the auspices of the General Agreement on Tariffs and Trade, or GATT.

The two men were expected to present measures already agreed upon for assessment by representatives from the other 103 nations taking part in the global negotiations.

The apparent resolution of the agricultural issue is considered a major step, although negotiators had said late last week that they needed to achieve full agreement on all issues by Monday to meet a Dec. 15 deadline for the global accord.

While the issues at hand are couched in the arcane language of international trade, the stakes for ordinary people everywhere could hardly be higher. Economic forecasts say the envisioned agreement could add $250 billion annually to global wealth by lowering tariff barriers and making it easier for nations to trade with each other.

By contrast, failure at a time when economies in Europe, America and Japan are struggling could have grave consequences--creating, as the respected London magazine the Economist put it, “the most perilous conditions for world trade since the 1930s.”

In comments from U.S. and European officials Tuesday, it became apparent that royalties in the entertainment industry had become the chief obstacle to a full U.S.-EC accord.

“We were not . . . able to conclude an agreement in the audio-visual sector because the EC was unwilling to provide foreign companies fair access to the revenues that are their due . . . .” Kantor said.

Although the movie industry was known to be a potential sticking point in the talks, the royalties issue was a sleeper.

The EC, mainly at French insistence, initially sought to exclude the audio-visual sector from trade negotiations, arguing it was a cultural, not a commercial, issue.

Fearful of being overwhelmed by popular American films and television series, the EC four years ago passed legislation requiring that at least 50% of a television station’s programming be of European origin.

All EC nations except Ireland and Luxembourg also subsidize their film industries, partly out of fear they might sink under the weight of American imports. The Motion Picture Assn. of America reported that the subsidies last year totaled $493 million, more than half from France. The United States strenuously opposes EC quotas and subsidies, which work against the interests of the American entertainment industry, one of the country’s strongest exporters.

But in the course of negotiations, Kantor told reporters that the United States was “very flexible. We were willing to deal with broadcast quotas and willing to be very liberal, in our view, on the subsidies. We were also willing to even look at . . . subsidies on new technologies in the future. But what we weren’t willing to do is sell out the rights of hard-working individuals who . . . have a legal right to collect royalties on their hard work.”

While Kantor declined to offer details, entertainment industry sources here said the dispute centered on taxes that France and some other EC countries impose on blank videotape cassettes. The revenues are distributed to producers, actors and writers of films to compensate them for widespread black-market tapings. A U.S. film industry source claimed such revenues are expected this year to total $10 million in France alone. No such levy exists in the United States.

Although U.S. films make up a significant part of those shown in France and other EC countries, American artists are excluded from a share of these funds. The American source also noted that while U.S.-made films help generate much of France’s film subsidies--which are financed in part through a 12% box office tax--an American filmmaker seeking to produce a movie in France would be ineligible for government subsidies.

EC negotiators were unwilling to budge on the issue. “We reached agreement on almost everything,” Brittan said. “But it would be wrong for the U.S. to get large sums of money for which it is not entitled.”

Although few details were presented in Brussels, the tentative accord on agriculture was apparently achieved through trade-offs.

The United States is believed to have bowed to French demands to allow a reduced level of reductions in EC export subsidies in return for greater access to community markets for American grain, meat, dairy and other specialty products. The United States also agreed not to challenge the legality of future EC agricultural reforms for nine rather than six years.

“The export potential of Europe has been preserved,” French Foreign Minister Alain Juppe said.

Despite these concessions, France refused to accept the agreement until its EC partners pledged to pick up the French share of any more European agricultural land that may need to be taken out of cultivation under the GATT agreement and to make up lost income suffered by its cattle farmers. These internal EC trade-offs are expected to be bitterly contested, but they seem unlikely to threaten the accord, community officials said.

Negotiators expressed cautious optimism, meanwhile, that the dispute on European subsidies to aircraft manufacturers could be resolved.

Washington has complained for years about government aid to Airbus Industrie--a consortium of companies from Britain, France, Spain and Germany that rivals America’s plane-making giants, Boeing and McDonnell Douglas.

Despite the mix of disappointment, confusion and exhaustion that hung over the talks as they broke Tuesday, both chief negotiators insisted the Dec. 15 deadline could be met.

“I think we’ve made so much progress and so much is at stake that it is impossible not to believe a deal of this magnitude is really going to be reached,” Brittan said.

Kantor added that areas already agreed upon in recent sessions between the United States and the EC--two of the world’s biggest traders--”would constitute the largest tariff cuts in world history.”

Isabelle Maelcamp in Brussels contributed to this report.