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Subject: France Calls Trade Pact Inadmissible; European Showdown Looms on Farm Pact
Date: Sun, 22 Nov 92 09:18:27 EST
Message-ID: <20.1992Nov22.091827@AmeriCast.com>

France Calls Trade Pact Inadmissible; European Showdown Looms on
Farm Pact Between EC and U.S.<By William Drozdiak<Washington Post
Foreign Service< PARIS, Nov. 21 - The French government
threatened today to reject a breakthrough trade agreement reached
by the United States and the European Community on farm subsi-
dies. France's action heralded a nasty showdown with its European
partners who are eager to wrap up a broad, global trade deal that
is being thwarted by the dispute.

As angry farmers vowed to protest nationwide, French Prime Minis-
ter Pierre Beregovoy called the terms of the accord "unaccept-
able" and said it "constitutes a grave threat for agriculture,
not just in France but in the whole of Europe."

France now stands isolated on the farm deal from other European
Community (EC) states, who welcomed the compromise. That agree-
ment defused a looming trade war and cleared the way for a suc-
cessful conclusion to the six-year-old global trade talks known
as the Uruguay Round.

The accord calls for the Europeans to sharply reduce farm subsi-
dies and reduce the land used to grow oilseeds such as soybeans,
sunflowers and rapeseed, used for cooking and industrial oils.
The United States had charged that European farm subsidies, which
grew during the 1980s, gave the continent's farmers an unfair ad-
vantage in growing cheap produce for sale on international mark-
ets.

British Prime Minister John Major hailed the accord's opening of
the way to a global trade agreement, which he said would be "the
best possible news" for the British and global economies. A
spokesman for the German government took a similar stance.

Ministers from the 12 EC governments will meet Wednesday to de-
cide whether to endorse the compromise.  Despite Beregovoy's
denunciation of the accord, it was still unclear whether France
would invoke a rarely used EC rule that permits an EC government
to veto an agreement on the grounds of "vital national in-
terests."

President Francois Mitterrand was described by aides as reluctant
to exercise the veto because of fears that it could exacerbate a
crisis over the EC's future.  Britain and Denmark have paralyzed
EC plans to implement a treaty for closer political and economic
union because of their reluctance to cede more national
sovereignty or create a single European currency.

But if France joins its partners in embracing the farm deal, it
could trigger massive disorders in rural regions that could bring
down the Socialist government four months ahead of national elec-
tions. As farmers vented outrage by burning hay and tires in
front of government buildings around France today, their leaders
vowed to escalate protests across Europe to force the EC to
renege on the deal. Luc Guyau, president of the union that
represents France's 1.7 million farmers, called it "a knife in
the back" and warned that the plight of his members was so
desperate that they would stop at nothing to block the agreement.

"Before we die, we will resist," Guyau said. "And we will do so
with force." Beregovoy implored the farmers to refrain from
violence and insisted the government would do everything in its
power to protect their livelihoods. "We are dealing with the de-
fense of France's interests, our agriculture, our economy, our
rural way of life," he said.

France is by far Europe's biggest agricultural producer, and the
high quality of its meat, grains, fruits, vegetables and wine has
helped to make farming the leading contributor to the country's
favorable trade balance.

But the powerful political clout of France's farmers is also
derived from the country's deep attachment to rural roots, which
are celebrated in music, literature and history as well as at the
dining table. Just as the romantic soul of German culture is
focused on the deep, dark forest, France's historical and legen-
dary traditions are embedded in la terre - the earth.

While less than 10 percent of France's 57 million citizens live
in farm communities - down from one-third of the population after
the war - even confirmed French urbanites express strong allegi-
ance to their ancestral lands and relatives who still till the
soil. As a result, the farm vote is cherished by every party. The
high cost of protection for the French farmer, which keeps food
prices high for the consumer, enjoys solid support across the
political spectrum.

With such widespread sympathy for the farmers, nobody wants to be
associated with any accord that would be perceived as detrimental
to their interests. That concern has shaped the Socialist
government's campaign to forestall a compromise in the farm
dispute with the United States even at the risk of holding up a
global trade agreement.

The Socialists already are expected to lose badly in the March
parliamentary elections, which will probably force Mitterrand to
share power with a new government dominated by his conservative
opponents. The Socialists had hoped to postpone a farm settlement
beyond the elections, when the conservatives would be saddled
with the daunting task of coping with a rebellion by disgruntled
farmers.

France argued that the EC should wait until the Clinton adminis-
tration took office before cutting a deal, but its partners in-
sisted that the best possible agreement was more likely with the
outgoing Republicans. In particular, Britain and Germany claimed
that paving the way for a global trade agreement by the year's
end was essential to pull the world out of recession and too im-
portant to wait even a few months.

In the farm conflict with the United States, French officials
acknowledge that the hefty subsidies paid to their oilseed farm-
ers may be against the rules of the General Agreement on Tariffs
and Trade, as confirmed in two GATT rulings on the issue. But
they say France has always maintained a high degree of state as-
sistance in order to slow population flight to the cities, sus-
tain impoverished rural communities and protect the environment
by keeping large parts of the countryside reserved for agricul-
ture.

France agreed to cut subsidies in May as part of a major overhaul
of the EC's bloated Common Agriculture Policy, which costs nearly
$50 billion a year or 70 percent of the EC's entire budget. The
French government said it would compromise with the United States
provided that its farmers would not have to absorb further sacri-
fices.

The compromise announced by U.S. and EC negotiators on Friday
calls for the EC to curtail farm subsidies by 21 percent and to
take 10 percent of the land used to grow oilseeds out of produc-
tion.

EC negotiators say the compromise with the United States falls
within the bounds of the EC agricultural reform. But French Agri-
culture Minister Jean-Pierre Soisson says the cut in subsidies
will force a quarter of European farmers into bankruptcy.
"There's going to be a battle of figures", said Jacques Delors,
the president of the EC's executive commission, referring to
Wednesday's ministerial review of the trade deal.<02:19 11-
22C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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