Blair House Blues
OFFICIALS at the IMF/World Bank annual meeting Sept. 28-30 have lost no opportunity to prod the US and France to resolve their dispute over farm exports in global trade talks in Geneva.
Yet US Trade Representative Mickey Kantor is right to reject French demands to reopen the Blair House agreement on farm subsidies, as he did on Sept. 27 in a meeting with the EC's top trade negotiator. The agreement limits subsidies that hurt US farm exports. In the case of wheat, cuts in US subsidies could reduce exports, an unhappy prospect in America's farm belt. Reopening the talks could prompt second thoughts about the pact in the US. The agreement was reached over French objections last December between the European Community and the United States. The issue threatens to stall the broader Uruguay Round of the General Agreement on Tariffs and Trade.
On Sept. 21, EC leaders reached a compromise with France. The statement recognized that the community intends to remain a major farm-product exporter and also wants to retain its position in world markets. But in effect the compromise only required the US and France to keep talking.
On the surface, France objects to the inclusion of food aid in Blair House's proposed 21 percent cut in subsidized food exports. But the agreement already exempts such aid. The larger objection is to the 21 percent cut itself, especially in the face of huge EC crop surpluses.
The key to a compromise may lie in implementation. The reduction is to take place over six years. If a formula can be found to take the biggest cuts toward the end of the period, it could give EC farmers time to adjust to the change.
To save GATT, this approach is worth exploring.