THE PREPARATORY talks for next week's trade summit in Seattle have failed to yield a clear agenda, confirming that progress against protectionism is going to be hard to achieve. The World Trade Organization's 135 member countries cannot decide which industry should be targeted next for tariff cutting, nor how trade-related issues such as labor standards should be worked into the talks. Environmental standards pose yet another dilemma. The United States wants these incorporated into future trade agreements, arguing that foreigners should not be allowed to undercut American producers at the expense of the environment. Poor countries retort that the United States should not impose its standards on them -- especially since America was happy to pollute extravagantly when it was a developing nation.

Despite these disagreements, it would be wrong to be defeatist -- partly because trade does so much to spread prosperity, and partly because many areas of possible advance exist. Take the environment. The United States cannot hope to persuade poor countries immediately to adopt First-World pollution standards, nor should it aspire to do so. But there are two more modest goals that it could and should adopt.

The first concerns the fuzzy line between national and international environmental regulation. Everybody accepts -- and the WTO's rules affirm this -- that countries may pass measures that reflect their sense of the environment's worth. Equally, everybody accepts that a country may not order other countries what to do internally. Sometimes, however, these beliefs conflict. The United States has sought to protect turtles, so upholding its environmental values. But in so doing it has barred shrimp from entering its market unless these were caught with turtle-safe nets.

In theory, the WTO is supposed to allow environmentalist import bans, so long as the reason for them is not disguised protectionism. In practice, however, the WTO is confused on the issue: At its first hearing it dismissed the turtle law entirely; at the appellate stage it accepted the logic of the law but still found against it. This ambiguity has eroded trust in the WTO's objectivity. To rebuild confidence, the Clinton administration wants to open up the WTO panels that sit in judgment over trade disputes, rather than shrouding them in secrecy. It also says it wants environmental groups and other interested parties to be allowed to argue before WTO panels, so that all feel they have had their fair say.

The second area in which a better balance between trade and the environment should be possible concerns subsidies. In a whole range of industries, governments subsidize producers in ways that both distort trade and harm the environment. By cutting subsidies, rather than defining trade liberalization narrowly as a drive to cut tariffs, the administration could promote trade and the environment at once.

Farmers across the developed world get government help to cultivate marginal land; this hurts the soil and discriminates against farmers in developing countries. Some oil-producing nations such as Mexico and Russia subsidize gasoline; this pollutes the air and discriminates against other oil-producing countries. Canada, Indonesia and many other nations sell forestry concessions below cost, another distortion of trade and a further blow against the environment. The world's fishermen get a fifth of their income from direct or indirect subsidies; small wonder that some fish species are in danger of extinction.

Ever since Congress denied it "fast-track" trade negotiating authority, the Clinton administration has sought to rebuild support for trade by reaching out to labor and environmental critics. If it can get subsidies and WTO transparency on the Seattle agenda, it may win over some of trade's critics and promote trade liberalization at the same time.