"JUMBO' SUMMIT DOES LITTLE TO HEAL FRANCE-EC FARM RIFT

"JUMBO' SUMMIT DOES LITTLE TO HEAL FRANCE-EC FARM RIFT

It was billed as a summit of resolution, a chance for the European Community to set aside its internal difficulties and get on with the business of negotiating a world trade deal.

Internal paralysis on the EC's farm trade objectives had brought to a halt negotiations among the 116 nations involved in the Uruguay Round - the highly complex talks involving market liberalization for everything from textiles to shipping - and EC officials hailed the meeting here this week as a milestone in getting the talks back on track.But when the dust from this "Jumbo" summit of 35 ministers had settled, there was no getting around the fact that among the 12 member states differences - potentially serious differences - remained.

This assessment is true, despite the fact that EC foreign, trade and farm ministers struck a compromise in the early hours of the morning Tuesday on French objections to the Blair House agreement between the EC and the United States on cutting farm subsidies.

EC Trade Commissioner Sir Leon Brittan said his negotiating position in the Uruguay Round of global trade-reform talks had been bolstered, a period of internal crisis had ended and "the road is clear for a conclusion" to the seven-year round.

Yet the best British Foreign Minister Douglas Hurd could say about the more than 12 hours of talks was that they produced "a draw," which he could only hope would be beneficial to the seven-year-old Uruguay Round.

While the majority of the EC's 12 member states accepted the premise that Sir Leon requires negotiating flexibility in his discussions with the United States, France continues to insist his room for maneuvering should be restricted.

The communique produced by the council of ministers does not order Sir Leon to renegotiate with the United States the terms of the Blair House pact. But Sir Leon is required to raise with his U.S. counterpart, Mickey Kantor, a series of French objections.

It's true that those French points were down from the 14 on which Paris had earlier sought changes. It's also true that Sir Leon succeeded in scrapping a linkage between these demands and a reference that their inclusion in Blair House meant the deal was incompatible with the reform of the EC Common Agriculture Policy (CAP) arduously accepted last year.

France believes its farmers will pay a heavy price through the support cutbacks negotiated in that reform and is adamant that they not be exceeded in the Uruguay Round.

Had that link between Blair House and CAP incompatibility remained, Sir Leon would have had little choice but to ask Washington to renegotiate the terms of the pact, a politically unpalatable proposition for the Clinton administration.

Under such circumstances, "you kiss the Uruguay Round goodbye," said one U.S. official.

Though Sir Leon has some wiggle room with which to seek "amplifications or additions" to the farm deal when he meets with Mr. Kantor on Monday, the French objections will not go down well in Washington. They were, in fact, rejected during the negotiations leading to the deal last year.

In any event, Mr. Kantor said Tuesday that the United States will not reopen its farm trade deal with the EC "either directly or indirectly." Mr. Kantor said his meeting next Monday with Sir Leon had been planned well in advance of the Jumbo summit, and that "reopening the Blair House agreement will not be on our agenda."

U.S. officials said Paris' demand for an extension beyond six years of a ''peace clause" restricting U.S. action against EC trade violations is tantamount to reopening Blair House and is therefore unacceptable.

Any curbs on U.S. exports of corn gluten, a cereal substitute used as animal feed, also would meet fierce resistance from Mr. Kantor.

Moreover, Washington is skeptical about the safeguards Paris is seeking, which would allow the community to temporarily combat import surges with duties.

France also wants to exclude existing grain stocks from the 21 percent cut in the volume of subsidized exports that is mandated in Blair House.

U.S. officials said releasing stocks onto the market is not necessarily in violation of the accord but said that a subsidized sale of the community's stocks of 33 million tons of grain would cause severe market disruptions and hurt U.S. farmers.

Even less satisfactory for Washington is the French idea to apply the 21 percent cut across the farm-product range so that some volumes are reduced more than others. The United States only agreed to accept the 21 percent figure, rather than 24 percent, because Brussels pledged to apply the cuts equally to all product sectors.

Sir Leon is aware that if he is to gain any concessions from Mr. Kantor, he will have to pay for them, perhaps through deeper tariff cuts in industrial goods like electronics or wood products.

He also is aware that the French will be looking over his shoulder at each stage of the negotiations between now and the Dec. 15 deadline. Paris will no doubt offer an appraisal of his meeting with Mr. Kantor when the EC foreign ministers council meets in Luxembourg Oct. 4-5.

Sir Leon's fierce clash during the Jumbo summit with Alain Juppe, the French foreign minister, was indicative of the tensions that exist between Paris and the Englishman.

There is only a shallow reservoir of trust between them and the fact that many in Washington consider Sir Leon to be "our best friend in the European Community," as one official put it, does little to put French minds at rest.

Sir Leon said the agreement "had cleared the air," leaving no excuse for the EC's trading partners to drag their feet in the Uruguay Round negotiations.

Mr. Juppe said the agreement was "good for France, and good for Europe," but French government officials worry that Sir Leon will make his peace with the Americans without any big changes to Blair House, negotiate accords in the services, intellectual property, textiles and tariff-cutting sectors of the Uruguay Round and force Paris to then vote on the whole package.

To vote against the obvious gains that would accrue to French industry and

financial services sectors would make the French center-right government unpopular with its natural constituency. Yet to accept the terms of a Uruguay Round accord with an agriculture section that has changed little, if at all,

from the current text would invite a violent response from French farmers.

Should the whole package be brought to a weighted vote in the Council, France almost certainly would be voted down by the other member states, but that might give Paris the opportunity to escape the wrath of farmers by laying blame for the deal at the feet of Brussels and the other EC member states.

"That's really the only way a deal can be done," said one EC Commission official.

Many commission officials, and some from the United States, expected nothing concrete to emerge from the Jumbo summit. In that respect, it would have to be considered a success.