After failing to reach agreement in six previous meetings, European Community trade and agriculture ministers last night approved a plan that would cut government farm support payments, but the proposal was immediately criticized by U.S. trade negotiators as not going far enough.
U.S. officials and representatives of other farm-exporting nations said the EC proposal is barely enough to breathe new life into negotiations to strengthen international trade rules, called the General Agreement on Tariffs and Trade (GATT).
The farm trade issue has become the main stumbling block to a successful conclusion of the trade talks. With the EC unwilling until now to move on the agricultural issue, which other nations consider crucial for the success of the negotiations, progress has stalled in other areas.
"At least we have a European proposal," said a U.S. trade official. "The question is whether it is subject to negotiations. If it is not, the round is still in trouble."
British Agriculture Secretary John Grummer, however, called the proposal "very considerable." The position adopted by the 12-nation trading bloc, reached after two days of intense debate in Brussels, would reduce farm subsidies by 30 percent over 10 years, according to news reports from the Belgian capital.
Despite last night's decision, a wide gulf remains between the EC position and a proposal put forward by the United States. The U.S. plan calls for cuts of 75 percent in government support payments and 90 percent in export subsidies, which American officials say have destabilized world farm trade and allowed Europe's inefficient farmers to gain markets.
At issue are wide-ranging payments that governments all over the world make to their farmers. In Europe, for example, it costs a small French farmer far more to produce grain than he can get for it in the marketplace. The difference is made up by government payments. The United States and other countries that are more efficient at producing wheat say that the payments create unfair competitive conditions in the world wheat market, depriving their farmers of sales.
On this side of the Atlantic, U.S. payments to dairy and peanut farmers, for example, have a similar effect.
These subsidies have had a major impact on a number of countries that depend heavily on farm exports. A group of 14 of them threatened Monday to quit the talks if the EC failed to come up with a meaningful proposal on agricultural subsidies. Some members of that bloc, called the Cairnes Group for the Australian city where they first met, wanted to leave the talks earlier but were persuaded not to.
"We want to produce a crisis now," said Argentine Agricultural Minister Felipe Sola.
Trade and agricultural officials from the United States, Canada, Australia and other nations attacked the EC plan as "minimalist." They said the 30 percent cuts start from a 1986 base, meaning Europe's reduction in support payments will actually be less than the figure cited. The cuts also fail to address export subsidies, they said.
France and Germany, voicing concerns that their politically powerful farmers would suffer from reductions in government subsidies, led the opposition within the EC to any changes in the community's agricultural policies, according to the reports from Brussels. France is concerned that lower trade barriers would allow cheaper foreign farm goods into the community, while Germany fears income losses for its farmers.
German Chancellor Helmut Kohl, who was reported by aides to have told President Bush he would favor cuts in agricultural support payments, has the added concern of keeping the votes of farmers in elections to be held Dec. 2 -- the day before the final session of GATT talks start in Brussels.
European ministers eased France and Germany's concerns last night by agreeing to a series of guarantees by other EC members that their farmers would be cushioned against the impact of the subsidy cuts, Reuters reported.
Meanwhile, another farm trade dispute emerged between the United States and the EC, one concerning a European ban on imports of practically all American meat. EC officials said they instituted the ban after European inspectors said U.S. slaughtering procedures were unhealthy. American officials said the EC is trying to block U.S. meat imports to help its farmers.