Trade talks collapse in Europe Bush's hopes for agreement dashed


WASHINGTON -- The Bush administration's lingering hopes for a pre-election breakthrough in world trade talks collapsed yesterday as negotiations in Brussels broke down, leaving U.S. and European officials much farther apart than before on trimming farm subsidies.

The failure of the meetings will certainly prolong and could conceivably doom 6-year-old negotiations to lower trade barriers around the world. European officials have expressed growing reluctance to cut a deal with a president who might soon be forced from office.

The U.S. law that bars Congress from amending trade agreements struck by presidents applies only to deals reached before next March 2, and both Democratic and Republican trade experts say it is unlikely that Gov. Bill Clinton would be able to come to terms with the Europeans so quickly if he is elected.

Carla A. Hills, the U.S. trade representative, has said it would be "virtually impossible" for the Bush administration to win the re-authorization of the 18-year-old fast-track legislation, under which the recently initialed North American Free Trade Agreement will also be considered. A Clinton administration working with a Democratic Congress might be more successful.

Many economists say that a global trade agreement would expand world economic output by $100 billion a year or more because it would encourage each country to produce whatever it makes most efficiently and import the rest. Without the agreement, they say, the world economy would grow more slowly.

The collapse of the meetings in Brussels yesterday will at least postpone the date when an agreement can go into force. Some && experts also say that the lack of an agreement might foster trade wars, restricting international commerce and world economic growth.

But labor-intensive industries in industrialized nations, including U.S. textile and steel producers, dispute the benefits of an agreement. They worry that a deal would drown them in a flood of imports from more efficient and sometimes subsidized foreign producers. Labor unions and a few economists contend that the United States will receive few gains from a global trade pact.

Despite speeches by French officials this week against any European concessions, some administration officials were still optimistic this morning that a deal might be possible.

"If agriculture breaks this week, we could finish the round by Christmas," a U.S. official said.

But by yesterday afternoon, senior administration officials were gloomy about the prospects for any pact in the near future and quickly blamed the European Community.

"Whereas last week in the meetings," a senior official said, "it appeared that both sides had come closer to proposals that would have allowed a political breakthrough on agriculture, which would have allowed us to wrap up the other issues, it now appears that the community has substantial difficulties even with some of the proposals they were willing to explore last week. It doesn't appear we have the basis for breakthrough in the near future."

A European Community official said the community was prepared to continue talking. But a senior Bush administration trade official said no further meetings were planned.

This week's negotiations in Brussels turned out to be vital not because of who was attending but because of the positions the sides took.

The Agriculture Department staff and European Community farm experts now in Brussels are far less senior than the agriculture and trade ministers who met 10 days ago in Brussels or the optimistic trade ministers who met last weekend in Toronto.

But this meeting dealt in great detail with the highly technical disputes that are actually blocking a global trade pact.

The outcome was a complete impasse. C. Joseph O'Mara, the U.S. Agriculture Department's chief trade negotiator, flew home yesterday while leaving several aides behind to work on minor issues.

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