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EC Says GATT Talks on Track

October 23, 1992

BRUSSELS, Belgium (AP) _ A world trade agreement that rests in the hands of European Community and U.S. negotiators is still alive, EC sources said Friday. But whether it could boost the sagging global economy soon is questioned.

Panic ensued after U.S. officials said Wednesday night the talks had collapsed. On Friday, British Prime Minister John Major and German Chancellor Helmut Kohl told EC Agriculture Commissioner Ray MacSharry to get back to bargaining with the Americans.

MacSharry and U.S. Agriculture Secretary Edward Madigan spoke by phone late Friday about international trade negotiations and a troublesome dispute on cereal substitutes for animal feed.

″It is clear from these contacts that both sides want to maintain contact and continue negotiations to achieve a rapid and successful conclusion on both issues,″ MacSharry said in a statement.

The trade fight concerns dozens of issues. Washington wants the 12-nation trade bloc to cut its subsidies to farmers and agricultural exporters. The community wants the giant American services sector, notably telecommunications, to be opened up to non-U.S. bidders.

Agricultural topics seem to create the most dangerous logjams.

″If agriculture can be got out of the way, the rest will fall into place,″ MacSharry spokesman Gerry Kiely said.

A settlement would pave the way for an accord in the Uruguay Round of world trade talks sponsored by the General Agreement on Tariffs and Trade, the Geneva-based organization that oversees world trade.

Those talks, involving 108 nations, have dragged on for six years.

The United States argues that European farm payments distort world trade and take away overseas sales from more efficient American farmers. Many agriculture-exporting countries and Third World nations support the U.S. position.

For France, two major issues are export subsidy cuts and tariffs on oilseeds - issues that sources say are not close to being settled.

Foreign-grown oilseeds are attractive to farmers as an inexpensive substitute for grain as animal feed. The community has already slashed the price of its cereals to make them more competitive. But France and Germany want levies on U.S. cereal substitutes because their small cereal farmers fear a flood of oilseeds from North or South America.

Community officials insisted Friday that European Community-U.S. efforts to save the world trade deal are still on track.

″We are working toward one goal, and that is to find a solution,″ said Nico Wegter, spokesman for the EC executive commission. ″We don’t think in terms of weeks, we think in terms of days.″

A British official said ″lines of communication are being kept open.″

″But we don’t know whether they’re being kept open so we can hear bad news, or whether they’re being kept open to continue negotiations,″ said the official, who spoke on condition of anonymity.

Wegter said Friday he hoped a deal would be sewn up in Geneva by the end of this year, but other officials said the vast and complicated agenda could take years to be agreed to by all the countries involved.

The Brussels talks have received new impetus in recent weeks, spurred partly by hopes of a deal before the U.S. presidential election Nov. 3.

Community sources said President Bush wants a deal that can boost his flagging election campaign, and EC negotiators want to take advantage of Washington’s hurry.

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