Against the Grain
ONCE again French farmers have put a choke hold on global trade reform that could expand world economic output by $100 billion a year. That's a lot for people in 108 nations to pay to protect the government subsidies of a relative handful of grain growers.
Hopes for a breakthrough in the stalemated GATT trade talks swept through Washington and other world capitals two weeks ago. United States Trade Representative Carla Hills announced that an agreement between the US and the European Community on agricultural issues was imminent. With such a deal, bargaining on other outstanding GATT issues could have resumed.
However, as it has done throughout the six-year Uruguay Round of market-opening talks within the framework of the General Agreement on Tariffs and Trade, last week the French government balked at substantially trimming the generous production and export subsidies it allots to farmers. Paris's negotiators hardened their position soon after French farmers, in a scene now familiar, clogged roads with their huge tractors.
This new setback, coming within months of what some experts regard as a make-or-break deadline for the talks, raises the specter that the entire Uruguay Round could fail. Besides opening agricultural markets, a new treaty would increase trade in manufactured goods and services.
It's true that family farming occupies a special place in France's national identity and culture. Even so, France's cave-in to the farmers is dismaying, given all that's at stake.
France is not alone in demanding continued protection from competition for farmers and other favored industries. Most of the GATT participants - not least the US - have cut special deals. Any new GATT treaty will be an imperfect bundle of compromises. But unlike other nations, France's political and business communities curiously have avoided a tough-minded dialogue on the costs and benefits of trade reform, both to France's overall economic future and to global prosperity. This has left French farmers w ith the whip hand.
Other members of the European Community, all of whom will benefit from a new GATT treaty, should have a Dutch-uncle talk with Paris. One EC official hinted that the Community would reach a deal with the US on agricultural supports over French objections, but such talk has only increased solidarity among agricultural ministers of the EC countries.
Political uncertainty stemming from the US presidential election also may be giving Europe's trade negotiators pause. Perhaps with the election past, a new spirit of let's get the job done will emerge.