Encouraged by European moves to lower farm subsidies, U.S. Trade Representative Carla Hills plans to seek more time from Congress to continue global free-trade talks that collapsed in Brussels almost two months ago, administration officials said yesterday.
The officials cautioned, however, that her plans could change if the 12-nation European Community fails to move its farm reform program forward within the next two weeks. And key lawmakers warned that the administration's request for an extension of negotiating authority, which must be made before March 1, could be defeated unless Hills can point to specific progress in the trade talks.
The Hills decision came after meetings here this week with EC Vice President Frans Andriessen, who indicated Monday that the Europeans were engaged in long-term changes in their agricultural support programs and now are willing to discuss subjects that were declared off-limits during the Brussels meeting.
President Bush commented on the issue in last night's State of the Union address, calling for a successful conclusion to the talks and saying, "This will create more real jobs, and more real growth -- for all nations."
At stake are four years of negotiations to strengthen the rules of free trade, known as the General Agreement on Tariffs and Trade, or GATT, that were due to end last month but collapsed after the EC, Japan and South Korea balked at negotiating changes in farm subsidies.
Since December, though, European and U.S. officials appear to have focused on the economic consequences of failure, especially in light of political uncertainties caused by the Persian Gulf War and the government crackdown in the Soviet Union.
At the same time, the EC, faced with internal budget problems caused by the ballooning cost of its farm subsidies, began considering changes that U.S. officials said would meet most American objectives.
EC officials have stressed that these reforms are being undertaken separately from the GATT talks amid the pressure generated by the addition of 800,000 East Germans to the population of the European Community, increased global competition due to the end of the U.S. drought and mounting farm surpluses at home.
As recently as three weeks ago, Hills told reporters that the trade talks had collapsed in Brussels because "of a lack of political will" on the part of the EC and other nations and asserted that she would not request extra time for the negotiations until there was a concrete demonstration of EC willingness to discuss the farm trade issue.
Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) said, "The administration would not have an easy time getting an extension past Congress."
The political opposition is being led by U.S. industrial and farm interests -- including textile manufacturers, dairy farmers and peanut and sugar growers -- that would lose their protected position under tougher international trade laws.
Since the Brussels meeting, other U.S. industries, considered crucial to mount a political campaign in favor of the GATT round, have begun complaining about the shape of the agreements emerging in other areas.
Pharmaceutical firms said the agreement fails to protect their products against piracy. The insurance industry, which hoped to press its global expansion through new trade rules, said it was glad the talks had collapsed because an accord would hurt it.
Jack Valenti, head of the Motion Picture Association, has told Hills his group will join the opposition if a final pact on service industries includes protection for European entertainment companies from foreign competition.
But other American industries are pushing for a GATT agreement, some going as far as to suggest that European counterparts lobby their governments to move on the farm issue and threaten to file unfair trade complaints if they don't.