Leaders of industrial democracies adjourned today's economic summit deliberations deadlocked on how to achieve the Reagan administration's key objectives of launching new trade talks and maintaining growth in the world economy.
French President Francois Mitterrand turned down appeals from President Reagan and other participants to set a firm date for a new round of negotiations to reduce barriers to world trade. A French spokesman said his primary concern was defending the interest of European farmers in maintaining protected markets for their products.
With only one day left in the meeting, there was also no indication that any participating country plans specific measures, such as cutting taxes, to speed up their economic growth this year to offset the slower expansion in the United States. West Germany, Japan and Britain were all resisting calls for them to take extra steps to encourage growth, except for increasing the long-term flexibility of their economies.
Senior officials worked through the night to draft a communique that would preserve an appearance of unity. But one U.S. official acknowledged that "nothing has been given on either side yet."
The French so adamant in their opposition to setting a firm date for the proposed talks within the framework of the General Agreement on Tariffs and Trade (GATT) that they appeared to mute their previous insistence on parallel negotiations on international monetary reform. In briefings today, French spokesmen put the emphasis on the need to preserve the European Community's highly protected agricultural sector.
Mitterrand's stubborn stand left France almost isolated. Japan, Canada, West Germany and Britain now support the U.S. demand for talks to begin in early 1986, and only Italy continued to give lukewarm support to the French position.
The Reagan administration wants to begin the talks, which would be the first global trade negotiations since 1979, to counter protectionist pressures in the United States and other countries. Even the French agree in principle that a new GATT round is necessary but insist that a detailed agenda be agreed upon before a specific date is set for the talks.
French officials said they were determined to maintain the common agricultural policy that they regard as the linchpin of the European Community. The costly scheme, which guarantees European farmers a fixed price for their produce, has been attacked as protectionist by the United States and was a major sticking point in the 1979 GATT round.
French presidential spokesman Michel Vauzelle said the United States was pushing for a new round expecting that agriculture would be at the top of the agenda this time. This charge was rejected by American officials, who said they wanted balanced trade talks on all issues including services, an area not covered until now.
"We will defend the gains of European farmers tooth and nail," Vauzelle said at a briefing.
At present, France is estimated to earn $4 billion a year in exports of subsidized agricultural products, mainly to developing countries. This represents a quarter of French food exports.
Reacting to the French veto, Secretary of State George P. Shultz said it would not prevent some form of trade negotiations next year, either on a multilateral basis in GATT or on a bilateral basis similar to this year's extensive talks with Japan seeking to open that country's markets. A senior U.S. official, however, called the bilateral approach "second best."
Defending the French stand, Mitterrand's spokesman cited an agreement by European Community countries on March 19 not to fix any precise date for the GATT round. France also has insisted that developing countries be fully involved in the preparations for new negotiations.
During today's sessions, Canadian Prime Minister Brian Mulroney offered a compromise on the trade issue and personally lobbied Mitterrand during an afternoon break, Canadian spokesmen said. The compromise, which emphasized the balanced nature of the proposed trade talks, was still not acceptable to the French.
The leaders also discussed the state of their economies, with the European participants praising American successes in creating jobs.