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Food for Thought: How Serious? : The 12-member European Community is finally negotiating. Or is it?

November 11, 1990

After weeks of fussing and stalling, the European Community finally put a proposal to cut farm subsidies on the bargaining table at multilateral trade talks. It's about time and long overdue.

Inadequate as the EC's proposal is--it calls only for moderate cuts, considered paltry by some--at least it is something and better than nothing. Now the question is, will the EC really negotiate in good faith with 23 days to go before final talks? The 12-nation group was the last major player among 105 countries to submit a proposal to reduce farm subsidies and supports that distort world trade. It repeatedly delayed action, which could have jeopardized four years of trade talks.

The EC's machinations over a farm proposal may have been all for naught, considering what it brought to the bargaining table was essentially what members and farmers were bickering about before and since the group missed the Oct. 15 deadline for submitting a plan. It proposed a 30% cut in farm subsidies over 10 years but some reductions have been made already. It did not address market access and export subsidies.

Agriculture is one of the 15 trade categories under discussion since 1986, when the General Agreement on Tariffs and Trade began talks in Uruguay. Securing a reduction in farm subsidies and supports from developed nations is a necessary quid pro quo to get developing countries to support new trade rules on services, intellectual properties and investments. Current trade rules only apply to manufactured goods. The United States has maintained that agriculture is crucial to the talks, which involve developing countries for the first time. A breakdown could result in the emergence of regional blocs.

EC efforts at farm reform undoubtedly face formidable domestic challenges. France and Germany, with big farm constituencies, were the last holdouts on the proposal. German Chancellor Helmut Kohl faces an election on Dec. 2, the day before GATT ministerial- level talks are to begin.

Eliminating trade distorting practices requires sacrifices by all. Washington recently backed down somewhat from its original proposal to eliminate all farm subsidies and price supports in five years. It now proposes cutting 90% of farm-export subsidies and 75% of farm-income supports over 10 years. Congress separately passed a new farm bill to reduce by 25% some crop subsidies paid to U.S. farmers.

The EC is giving mixed signals as the talks approach the final countdown to Dec. 3. Just days before presenting its farm proposal, it slapped a ban on virtually all imports of U.S. meat on the basis of health inspection standards. Frans Andriessen, an EC trade official, conceded the farm proposal "will not make it easier to negotiate, but at least we are in a position to start." The EC needs to get serious if it expects to be taken seriously.

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