U.S. TO PUSH STRONG SUMMIT AGRICULTURE STATEMENT
The United States will push for a
strong statement from Western heads-of-state at the June
economic summit in Venice, urging "comprehensive" negotiations
on agriculture begin immediately to reduce domestic farm
subsidies, the senior U.S. planner for the summit said.
    "Agriculture has really become the number one international
economic problem," Allen Wallis, undersecretary of state for
economic affairs, told Reuters in an interview.
    At the Tokyo economic summit last year, western leaders
identified agriculture as a major international problem but
made no specific recommendations. This year, Wallis said the
U.S. will press for a statement instructing trade ministers to
begin negotiating on the issue, and include domestic programs.
    While the Western leaders, including president Reagan, will
not conduct specific negotiations, Wallis said they can give a
push to the agriculture talks under the General Agreement on
Tariffs and Trade (GATT).
    Wallis said the leaders should endorse a "comprehensive"
negotiation, which is interpreted as including domestic
policies as well as import restraints and export subsidies.
    "They (GATT talks) really have to deal with domestic
policies, as well as trade arrangements," Wallis said.
    Trade Representative Clayton Yeutter has said a summit
statement of support for agriculture talks is part of an
overall U.S. strategy to build momentum for the GATT farm
talks.
    Public statements in recent weeks by several members of the
Reagan cabinet have stressed the agriculture issue.
    Yeutter and Agriculture Secretary Richard Lyng will
repeatedly discuss agriculture during a visit to Japan starting
next week. Yeutter said agriculture will also be on the agenda
of the trade ministers "quadrilateral" talks among
Japan, the European Community, the U.S. and Canada this month.
    And the ministerial meeting of the Paris-based Organization
for Economic Cooperation and Development, OECD, in May will
highlight the agriculture problem, Yeutter said.
    The OECD in May is expected to release a study of domestic
farm subsidies which shows that Japan has the highest subsidies
among industrial countries, but aid to farmers is also generous
in the EC and United States.
    The controversial OECD study calculated a measure of farm
subsidies called the Producer Subsidy Equivalent, PSE, which
allows farm aid to be compared across countries.
    Some officials including British Agriculture Minister
Michael Jopling, have said the PSE could be useful as a method
of negotiating lower domestic farm subsidies worldwide.
    However, the State Department's Wallis said while the PSE
can be useful in negotiations, it has shortcomings and "its not
definitive."
    He and other U.S. officials said the Reagan administration
has not yet reached a decision on a specific U.S. agriculture
proposal to present to the GATT.
    "I would expect it (U.S. proposal) to be in the fall,"
after the series of international meetings, Wallis said.
    At preliminary meetings of the GATT agriculture committee,
the United States has pushed for the so-called "freeze and
rollback" approach. Subsidies would first be frozen at current
levels, then rolled-back jointly in stages.
    However, the Reagan administration perplexed some trade
analysts recently by reacting cooly to a plan by Australian
prime minister Bob Hawke calling for a similar approach. Hawke
unveiled a seven-point plan to freeze and subsequently reduce
the gap between high farm price supports and world prices.
    Australia is leading a the so-called Cairns group of 13
coutries pressing for freer agriculture trade.
    "The proposals that the so-called Cairns group are coming
up with seem to be focusing on short-run, quick fixes which is
not what we think is what's called for here," Wallis said.
    Wallis and other said the U.S. wants a "long-range"
solution to the agriculture problem.
    U.S. officials also have criticized the Australian proposal
because they said it deals primarily with the difference
between domestic prices and world levels in the EC and U.S.,
but fails to focus on the question of market access.
    At the same time the U.S. is rejecting the Australian
"quick fix", Wallis said the U.S. will press at the summit for
a declaration urging that agriculture talks be completed
"expeditiously", or within two years.
    The unstated U.S. strategy, U.S. officials said, is to keep
the pressure on the EC this year through the export enhancement
program and lower value of the dollar, in the hope that a
sweeping agriculture agreement is possible in 1988.
 Reuter
