White House finds itself at odds with Congress, farmers, as well as EC; lack of progress could lead US to retaliate
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AS the world's multilateral trade talks move into their final stage, the Bush administration finds itself out of sync not only with the European Community (EC), but with its own farmers as well.
The White House has made sweeping proposals to eliminate farm subsidies around the world. But Congress is taking a go-slow approach as it crafts its 1990 farm legislation. This approach appears to reflect the mood of most US farmers. ''Let's walk, not run, toward free trade,'' Congress and farmers seem to say.
The nearly 100-nation General Agreement on Tariffs and Trade (GATT) has until December to negotiate liberalized trading rules in a range of areas. The dispute over agriculture could sink an agreement.
In the GATT negotiations, the US is supported by several nations that do not have or cannot afford large subsidies to their farmers. The US is opposed by the EC and Japan, both of whom support their farmers more heavily than the US.
Should the GATT agreement fail, US agriculture secretary Clayton Yeutter is suggesting nothing less than a trade war in agricultural goods.
''Maybe the Europeans hoped we would settle for a modest result, rather than have the exercise fail,'' he said in a Monitor interview. ''They may have hoped at the end we would say: 'If this is the best we can do, then this is the best we could do.' That is a strategy that will not succeed.''
This is strong rhetoric, especially in the context of slow-moving, tradition-bound farm policy. From an executive perspective, it is easy to talk about eliminating farm subsidies. From a legislative perspective, the transformation is more difficult.
''These countries that are the major players are just like the United States,'' says Gene Moos, an agricultural policy consultant in Washington, D.C. ''You get into a political game (where) there are winners and losers. And that's no easier to do in the international arena than it is in the House and the Senate.''
That is why many US agricultural observers expect little, if any, farm-policy reform from GATT.
''You are now down to the point that it will take a major crisis to force change in agriculture,'' says Dale Hathaway, an international farm policy consultant based in Washington. That seems unlikely, he adds, because economic pressures of a few years ago - huge surpluses, rock-bottom prices - have eased considerably worldwide.
Agricultural observers in Europe are more optimistic about the GATT talks.
''I think they have quite a good prospect of being successful (but) not quite in the way the Americans want,'' says Stefan Tangermann, an agricultural economist at the University of Gottingen in West Germany. In the past six months, the EC has become more bold in its farm-reform ideas. ''I think the Americans have begun to understand that the EC is much more flexible than it used to be.''
EC officials talk privately of the need to reduce import barriers and export subsidies to farmers. Reform may be helped somewhat by EC integration planned for 1992 and the reunification of Germany, they say, which has taken the spotlight off farm subsidies.
But that does not mean these programs will be eliminated. Even if a GATT compromise is reached, it is not clear that Congress would pass it.
Too little progress on agricultural reform may cause farm-state legislators to balk at the plan. ''That's tough politics to tell (Kansas Sen.) Bob Dole and (House Speaker) Tom Foley and other people that their constituency has to be sacrificed for the national good,'' Mr. Moos says.
Too much agricultural reform in GATT might lead to certain farm and other lobby groups joining forces to block passage of the treaty.
Already some small-farm and environmental groups protest US proposals in the GATT talks that would limit a nation's ability to set food-safety standards above international minimums.
''Do I think the solution is turning over this process to a bunch of guys in Rome? Heck no!'' says Mark Ritchie, executive director of the Institute for Agriculture and Trade Policy. He envisions a coalition of environmental and small-farm groups joining hands with farm lobbies whose commodities would be threatened by free trade.
Congress is interested in GATT but not sold on it.
''I am prepared to respect what they negotiate at GATT,'' says Sen. Bob Kerrey (D) of Nebraska. But the administration will have to respect Congress' trade legislation and its controversial Super 301 provision, which allows the US to retaliate against countries it determines break international trading rules.Christian Science Monitor
