GATT Talks Teeter over Subsidies Series: INTERNATIONAL TRADE TALKS IN BRUSSELS. Part 2 of a Series. First of Two Articles Appearing Today

Article excerpt

FOUR years of international trade talks, originally designed to usher in an era of freer world trade and more open markets, stood on the verge of collapse yesterday, as the European Community held firm to a plan for agricultural subsidy cuts that its trading partners reject as inadequate.

The deadlock results from the EC's refusal to modify its proposal for a 30 percent reduction in farm supports over 10 years.

There was still some possibility of a backdown by EC farm and trade ministers late yesterday, that could save the so-called Uruguay Round of the General Agreement on Tariffs and Trade, or GATT, from failure.

But with words like "stalemate," "intransigence," and "propaganda" dominating the 100-nation talks, no breakthrough appeared able to deliver the ambitious results first envisioned in 1986 for 15 sectors, from textiles and services to dispute settlement.

International trade regulations to further the development of a "new world order" after the end of the cold war also have yet to take shape.

Before the GATT ministerial meeting opened Monday, some United States representatives and others expressed hope that a successful conclusion could add an economic dimension to the "new world order" touted by Washington officials and echoed by Soviet leader Mikhail Gorbachev and others.

Such lofty goals appear especially unrealistic, however, with the talks almost hopelessly stuck on the issue of farm trade liberalization.

The US and the Cairns Group of 13 food-exporting nations, including Canada, Australia, New Zealand, and Argentina, say the GATT talks cannot move forward without specific EC proposals for cutting agricultural export subsidies and improving market access.

"The process stands blocked at this stage, and the conference is in a very serious impasse," says Trade Negotiating Committee Chairman Hector Gros Espiell, Uruguay's minister of foreign affairs.

Earlier Rufus Yerxa, the deputy US trade representative said the negotiations "are very close to collapse. …