Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.ibd From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Headline Article Date: Mon, 26 Oct 92 13:29:30 EST Message-ID: <14.1992Oct26.132931@AmeriCast.com> They Pressure France On Farm-Trade Dispute With U.S. Investor's Business Daily News Services In London Britain and Germany, struggling to mend fences and avoid a trade war with the U.S., moved to pressure France Friday and agreed to instruct European Community officials to reach an agreement. British Prime Minister John Major, the current president of the EC, and German Chancellor Helmut Kohl decided during a 30-minute telephone call to tell the community negotiator on farm subsi- dies, Ray MacSharry of Ireland, to get back to bargaining with the Americans, a spokeswoman for Major said. "They agreed we must say to the (European) Commission that the talks must not be allowed to founder as a matter of policy," said the spokeswoman at Major's 10 Downing Street office. She spoke on condition of anonymity. The European Commission, the community's Brussels- based executive arm, negotiates on behalf of all 12 member na- tions. The British-German move appeared aimed both at reviving the talks and further isolating France, which refuses to compromise over community subsidies to farmers. The talks involve 108 nations and are being held under the auspices of the General Agreement on Tariffs and Trade, the Geneva-based organization that oversees world trade. The U.S.-European dispute is blocking a deal. France has a powerful voting lobby of small farmers, including 145,000 soybean farmers. The Bush administration says European soybean subsidies cost other countries $2 billion - half borne by American soybean farmers. The community puts losses at $400 mil- lion. The first U.S. retaliation would be $1 billion in tariffs on community soybeans. Major and Kohl agreed that MacSharry, the community's Agriculture Commissioner, should warn the Americans "how very dangerous and damaging retaliation on oilseeds (soybe- ans) would be," the Downing Street spokeswoman said. U.S. offi- cials said Wednesday the talks had collapsed. The European Com- mission admitted there was trouble but said negotiations were still alive. In the subsequent disarray, Britain and Germany im- mediately distanced Britain, Germany Seek To Avert Trade War themselves from France, saying the differences were small and flatly contradicting a French contention that there could be no more serious negotiations for several months. In Bonn, Kohl's spokesman, Dieter Vogel, told reporters, "We would like these talks to be resumed. That's why Mr. Major called the chancellor today." The six-year talks had received new impetus in recent weeks, spurred partly by hopes of a deal before the Nov. 3 U.S. presidential election. Trade Secretary Michael Heseltine, in a radio interview Friday, said a deal could be reached without France. He also accused Commission President Jacques Delors, who is French, of siding with Paris instead of the community's more conciliatory majority. EC leaders meeting in Birmingham, Eng- land, last week instructed the Commission "to get on with their job," said Heseltine. "The French were a part of that meeting," he added. "The difficulty is that the president of the Commission is very close to French interests of this matter and he has con- flicting loyalties . . . he should act as the European he is." Delors maintains that a balanced deal does not yet exist and warned Washington it should not think it can bring the EC to its knees. MacSharry said Friday he had spoken to U.S. Agriculture Secretary Ed Madigan and both men wanted rapid agreement to free world trade and to end an EC-U.S. oilseeds feud. "It is clear from these contacts that both sides want to maintain contact and continue negotiations to achieve a rapid and successful conclu- sion on both issues," a statement from the Commission, the EC's executive body, quoted MacSharry as saying. At stake in the multifaceted GATT talks is a trade package that could give the recession-weary world economy a boost of up to $200 billion and create hundreds of thousands of jobs globally. The size of the goal and the stress of on-again, off-again nego- tiations is, as a result, tearing at the fabric of the 12-nation EC, which negotiates as a single unit at GATT. Officials said MacSharry and Madigan might meet in Ireland over the weekend. But late Friday, Madigan's office said no such talks were scheduled. Top U.S. technical farm negotiator Joe O'Mara flew home Thursday after talks with his EC counterpart, Guy Legras, on oilseed and cereals substitutes and farm subsidies broke down, and officials in Washington and Brussels immediately started trading open threats of a trans-Atlantic trade war. "Technical talks had gone as far as they could go," a Commission spokesman said Friday. "It is now a question of political breakthroughs." Diplomats agree that France has become the main obstacle to an agreement on the EC side because Paris fears that any concessions to U.S. demands would antagonize its irascible farmers before parliamentary elec- tions in March. Other leading world trading nations openly ex- pressed irritation Friday over the breakdown in talks in Brussels. "It is quite annoying not only for Japan, but also the countries of Asia, that we are made to just wait while the U.S. and the EC discuss matters among themselves," said Japan's Minis- ter of International Trade and Industry Kozo Watanabe. This article is copyright 1992 Investors Business Daily. Redis- tribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM