Yeutter fears trade war over EC stance

November 14, 1990|By Gilbert A.Lewthwaite | Gilbert A.Lewthwaite,London Bureau of The Sun

LONDON -- Agriculture Secretary Clayton K. Yeutter accused the European Community yesterday of a "self-centered and timid" approach to agricultural reform that threatens to unleash a global trade war.

Mr. Yeutter denied using "scare tactics" and said the Europeans are in for "a very rude awakening."

"We will not, we cannot, stand idly by as our farmers lose international markets and their share in global prosperity because of unfair barriers to trade and indefensible internal supports," he said.

Opening a European tour to press for further trade concessions with a speech to the Royal Institute of International Affairs here, Mr. Yeutter said the United States would prefer no new General Agreement on Tariffs and Trade to a bad agreement.

He said only "substantial" European reforms could save the latest GATT talks, known as the Uruguay Round.

Failure to reach agreement on the agricultural component of international trade would produce trade war and increase protectionism, he said, adding, "As history has shown there are no winners in such situations; we all lose, some just lose more than others."

The United States has called for:

* A 75 percent reduction in market barriers over the next 10 years.

* A phasing out of trade-distorting internal supports by 75 percent over 10 years.

* A 90 percent reduction in export subsidies over the next 10 years.

* The use of scientific procedures and evidence in imposin health-related standards and regulations, which the United States claims are often little more than thinly veiled trade barriers.

Mr. Yeutter said Europe's trade-distorting agricultural policie are costing taxpayers and consumers in the industrial world more than $250 billion a year and have "severely hurt" U.S. farmers. Third-world producers are losing $25 billion in income each year he said.

"What a waste. . . . It is a loss we cannot continue to tolerate," h said.

The 12 members of the European Community, after seve marathon meetings, agreed this month to offer a 30 percent cut in farm subsidies during the Uruguay Round.

"This is progress?" asked Mr.Yeutter. "This is seriou commitment to trade reform? This is the way to make the Uruguay Round a success? The world badly needs significant, meaningful trade reforms in agriculture, but, regrettably, this has not yet been recognized in the EC."

A meeting between U.S. and European officials to discuss the U.S. offer, scheduled for today was suddenly canceled by the United States. With full ministerial negotiations set to start in Brussels, Belgium, Dec. 3, time for a compromise is running out.

British Agriculture Secretary John Gummer said in London yesterday that agricultural reform has taken the European Community to a "straining point."

"This very substantial package which the community has offered is pretty close to what the community can bear," he said. He accused the United States of not explaining its proposals and of "not listening" to the European case for its reforms.

The Europeans particularly objected to U.S. insistence on maintaining income aid for farmers and the refusal to impose limits on other forms of acceptable supports. They also felt the U.S. proposal covered too narrow a range of products.

The Bush administration's proposal was "unacceptable" because it was too skewed to U.S. interests, Mr. Gummer said, adding, "The U.S. has not moved one iota. There has not been a single sign of any movement whatsoever. We can't go on addressing each other through megaphones."

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