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France is seeking additional cash from the European federation as compensation for signing a world trade deal and to cushion French farmers from GATT repercussions. The deal France signed will allow Europe to export an additional eight million tons of wheat to the US for the next six years. Germany, Britain, Denmark and the Netherlands are against such an act since it upsets the EC budget and other nations are also seeking compensation for their special interests that are affected by GATT.

A meeting of EC leaders headed by Trade Commissioner Sir Leon Brittan failed to resolve the crisis over France's rejection of the Blair House accord. France continued to insist on reopening of the farm subsidies treaty as well as restrictions on Brittan's negotiating authority with the US. Brittan is required by his position to raise the issues disputed by France, although he may not request for the reopening of the said treaty. Resolution of the dispute is crucial to successful negotiations of the Uruguay Round of trade talks.

The US Department of Agriculture's Conservation Reserve Program is diminishing the competitiveness of the US wheat industry in the global market. Countries such as Canada, Argentina, Australia and members of the European Union react to increasing global grain prices by increasing wheat production and acreage. In contrast, the US wheat industry increased production by only 5%, resulting in a 23% decrease in wheat exports and US market share dropping to 24% in FY 1996-1997. The government should review its policy of locking up 16 mil to 20 mil acres of productive land in terms of international competitiveness.

Europe's Common Agricultural Policy must be changed to conform to several developments. First, the European Union had welcomed Poland, Hungary and the Czech Republic as members. The new farm policy must therefore accommodate additional farmers and provide more agricultural subsidies. Furthermore, billions of rich consumers will be willing to buy European farm products at lucrative prices; hence, the need for an export-oriented farm policy.

Agriculture Sec. Dan Glickman agreed to consider India's request for assistance in the areas of genetic engineering, hybrid seeds, post-harvest technology and cold storage and transportation infrastructure. During a recent state visit, Glickman also signed an agreement on agricultural research that would increase cooperation between scientists and research and educational institutions in the US and India.

The French government has sustained its rejection of the Blair House farm accord signed by the US and the EC. France's opposition to the bill has been unwavering, although the government has been careful to couch the protests in diplomatic subtleties. Furthermore, the French government has discouraged any dissenting discussions, hence the need to revise a report prepared for a parliamentary finance commission stating that it was futile for France to hope that it would gain the upper hand in the GATT talks by taking a hard line on farm subsidy issues.

Officials of US and European commodity exchanges warn that failure of trade officals to pass the Blair House farm accord will have a negative impact on the Uruguay Round of global trade talks and consequently, on international trade. London Commodity Exchange CEO Robin Woodhead stated that the accord would effectively lower government subsidies. The Blair House accord helped to resolve crucial subsidy issues by setting subsidy reductions at 36% and resolving the oilseed dispute between the US and Europe. However, France has called for the renegotiations of the Blair House accord.

France is preparing a farm policy document, that it hopes will influence the European Community foreign and farm ministers at the September meeting. Jean Puech, French minister for agriculture and fisheries stated that the September meeting will center on plans to keep France from being isolated in its position on farm issues. France has been successful in bringing other EC countries onto its side over objections to the US-EC Blair House accord. It is unclear whether a reiteration of France's displeasure with the accord will change over the next coming weeks when it consults with other EC governments.

The US government warned the EC that it may be forced to impose trade restrictions against the Community if a bilateraloilseeds treaty is not ratified soon. US Agriculture Sec Mike Esoy stated that the soybean producers may seek retaliation if the EC fails to ratify the treatywhich calls for a reduction in the subsidies to European oilseeds farmers. However, ratification of the accord has been delayed because of a veto threat by France.

German Farm Federation Pres Constantin Heereman would like to revive an agricultural conference between the US and EC since most German farmers are dissatisfied with the US-EC farm agreement. Talks on agricultural conflicts are often used to camouflage other primary concerns such as telecommunications and textiles. As a result, the focus on agricultural questions is shifted to other matters.

The EC plans to introduce reforms in its agrimonetary policies which will mean abolishing monetary compensation starting Jan 1, 1993. The EC will implement a switchover system which will close any gaps between EC currencies to prevent a drop in farm incomes in the countries with stronger currencies. The new agreement provides that farmers who experience losses because of currency fluctuations will receive 75% of the increase in support price. The green rate will become the main mechanism for defending farmers against foreign exchange fluctuations.

International trade and the world economy is expected to improve in the foreseen approval of the US-European agricultural agreement which is worth around $200 billion. The deal will mandate the commercial development of the European farm welfare system and improve the market shares of American subsidiaries based in Europe. The agreement also resolved some of the problems regarding access to markets and services.

Finnish farmers have expressed concern that their country's membership in the EC will adversely affect their economic welfare. Finland will have to follow EC agricultural policies. At present, Finland's farm subsidies are among the world's highest. Finnish farm prices are substantially higher than EC prices because Finland's shorter farming season results in smaller yields. The farmers' concerns, however, are not shared by the country's business sector because of the higher food prices Finnish citizens are paying for.