Talk over subsidies Negotiators hope to avert trade war The Associated Press contributed to this article.

U.S., EC

November 03, 1992

CHICAGO -- The European Community's agricultural commissioner said it was possible that he and his U.S. counterpart could strike a deal on an oilseeds dispute late last evening as talks between top U.S. and European Community trade officials lasted into the evening.

EC Farm Commissioner Ray MacSharry said, however, that the two sides, struggling to break an impasse over EC farm subsidies and unblock world trade talks, were only discussing variations of existing proposals.

"It's the same old thing," Mr. MacSharry told reporters as he and U.S. Agriculture Secretary Edward Madigan left for a working dinner where they would try to settle the rift over the EC oilseeds subsidies, which threatens to spark a trade war.

"In the end there will be a text that is politically acceptable," Mr. MacSherry said.

The dispute is holding up six years of talks under the General Agreement on Tariffs and Trade, which aims at freeing up world cmmerce and adding as much as $200 billion annually to the world economy.

Asked if the two sides were working on a compromise to calculate the EC's oilseeds output in hectares as well as tonnage, Mr. MacSharry said the EC was bound to operate within the laws of its common agricultural policy, indicating the Community opposed basing the calculation on tonnage.

The United States has pressed the EC to reduce its subsidized oilseed output from more than 13 million tons to less than 9 million.

The EC has said that is too low and wants to base its cutback on a reduction of planted hectares.

But the United States has countered that European Community estimates of its yields are unrealistically low, and that its production could stay unacceptably high, trade sources have said.

Earlier, USDA spokesman Roger Runningen told reporters the two sides were working "on language," but Mr. MacSharry declined to say specifically whether it was the framework for an oilseeds agreement.

"There have been so many texts available," he said.

The two sides are in a last-ditch effort to make a deal on oilseeds that would clear the way for the United States and the EC to resolve other trade differences that have been a major barrier in the 108-nation GATT talks to reform a wide range of world trade.

The United States also has threatened to retaliate against the EC for its oilseed subsidies, which trade panels have said violate existing agreements.

Mr. Runningen earlier said the EC and the U.S. agriculture official's commitment to continue talks that had been scheduled to end at midday showed the two sides were willing to strike a deal.

Mr. Runningen also said that Mr. Madigan conferred yesterday with U.S. Trade Representative Carla A. Hills and "with a few other people" at the White House.

The United States has been insisting that the European Community slice the volume of its subsidies for farm exports by 24 percent.

But sources, requesting anonymity, have said both sides were close to settling on a 21 percent reduction over six or seven years.

The United States has no soybean price support system. It guarantees a minimum price for corn and wheat to farmers who agree to limit their production of those crops.

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