HOUSTON, JULY 11 -- By all accounts, three paragraphs on farm trade proved to be the most contentious part of the today's 16-page final communique of the 16th economic summit.

It took nine hours of wrangling, but by 4 this morning aides came up with a declaration that leaders of the industrialized democracies said would break a four-year impasse between the United States and its European allies over reducing farm subsidies and give the Uruguay Round of free trade talks a badly needed jump start for its final five months.

The communique stitched together competing U.S. and European views in a way that appeared to satisfy everyone and allow the summit leaders to declare they had moved the trade talks forward.

It committed them to "a high level of personal involvement" in the trade talks and to "exercise political leadership" to make sure they succeed. "We identified the successful completion of the Uruguay Round of global free trade talks as one of the highest economic priorities. We recognize that agreement on fundamental reform of agriculture is critical to achieving this goal," President Bush said.

To the dismay of the Europeans, Bush forced the farm trade issue front and center on the summit agenda, one of the few times an economic summit has dealt with trade issues in a detailed way.

But Bush and his top trade aide, U.S. Trade Representative Carla A. Hills, feared that the entire Uruguay Round to strengthen the compact on world trade, the General Agreement on Tariffs and Trade (GATT), would collapse if the leaders failed to give a high-level political push to their negotiators.

"The clear signal from the seven that we want progress . . . will make it possible we hope to complete the Uruguay Round this year," Canadian Prime Minister Brian Mulroney said.

The main transatlantic battle since the trade talks started in the Uruguayan beach resort of Punta del Este in 1986 was over how far and how fast to cut farm subsidies, especially those on commodities targeted for export sales.

The subsidies put money in farmers' pockets, but raise food prices. For instance, while the world price of sugar is about 9 cents a pound, it costs about 45 cents a pound in Washington-area markets, largely because low-cost imports are blocked and U.S. producers are guaranteed 22 cents a pound for raw sugar. Prices are even higher in Europe, where government subsidies have turned the Europeans from one of the largest importers of sugar into a major exporter.

The United States called for their elimination -- which Hills today said remains her goal -- while the European Community (EC) insisted supports are needed for its 12 million farmers for social and political as well as competitive reasons.

Those differences still exist. What has changed, the leaders agreed, is a new willingness to work in negotiations to narrow them.

"Agriculture subsidies are to be substantially reduced," said West German Chancellor Helmut Kohl in one of the clearest statements by a European leader that the continent would move away from payments that have turned its farmers into leading exporters and disrupted farm trade worldwide. "We cannot keep saying, 'No. No. No,' " added Jacque Delors, president of the EC, the common market that negotiates on trade for its 12 member nations.

Bush noted that an agreement in the Uruguay Round will demand an end to many U.S. farm subsidies, which he acknowledged could provoke opposition from highly protected special interests, such as sugar and peanut growers, and their congressional supporters.

"But that's a little down the road yet," the president continued. "But I am convinced, and I believe Congress would support the concept, that if we all do this and we all reduce barriers and we all make a freer trading system, the United States can compete."

The leaders further noted that other parts of the communique challenge farm exporting nations, including third World countries, that have demanded agricultural trade reform, to become free traders in other ways.

A British official said the United States got 60 percent of what it wanted. Hills said the statement "represents quite an evolution of the EC position" since it committed the community for the first time to reduce export subsidies.

"Between friends, and inside the family, there are no victories. There are just good compromises," Delors said.

The summit results were also hailed by former trade representative William E. Brock, who on Monday appeared here with a group of prominent private individuals from around the world to urge the leaders to move on trade. "The substance {of the communique} is not quite what anyone in the U.S. would have desired, but it is probably better than we have a right to expect given the degree of intransigence of some of the other nations," he said.

The trade talks in Geneva move into a crucial phase in less than two weeks, and one of the clearest acomplishments of the summit declaration was to make a draft by the chairman of the negotiating committee, Dutch agricultural expert Aart deZeeuw, the basis for discussions.

The United States especially wants the Uruguay Round to deal with special subsidies for exported products, internal supports for farmers who cannot compete without them, and barriers to agricultural imports. The EC is pleased that deZeeuw gives equal weight to all three areas, instead of focusing on export subsidies as the United States has.

The communique recognized the EC view that farm subsidies are considered the glue that holds the community together and that small farms are part of a social fabric that Europeans want to preserve.

French President Francois Mitterrand noted that these cultural differences make the farm trade negotiations difficult. But Mulroney said that, "We would like to get rid of these trade support subsidies. . . . The EC argues that 'They are part of our culture.' Well, they are part of our culture too. But they cost an arm and a leg."