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U.S., E.C. Negotiators Report Breakthrough in Trade Talks

By William Drozdiak
The Washington Post

BRUSSELS, Belgium

The chief U.S. and European Community trade negotiators said Thursday they were close to resolving key obstacles to a global trade agreement that could help revive economies around the world.

Ending two days of talks here, U.S. Trade Representative Mickey Kantor and EC trade commissioner Leon Brittan said they had made enough progress to expect to unveil an accord Monday, after consultations in Washington and European capitals.

"I did not expect to make as much progress as we have made," Brittan said.

A agreement between the United States and the 12-nation EC would speed a conclusion of the seven-year negotiations aimed at expanding the General Agreement on Tariffs and Trade, or GATT.

Kantor said he was "now confident we can get a GATT agreement by Dec. 15" -- the deadline Congress set for the U.S. negotiators.

Chances are now better than ever for a U.S.-European agreement on reducing subsidies on farm exports, the chief reason for a stalemate in the GATT talks, Kantor said.

Kantor left for Washington but said he planned to return to Brussels by Monday morning. He said he was leaving behind key technical aides to try to iron out the final details.

Negotiators declined to discuss details, but industry sources said the United States is likely to accept a longer period for reducing export subsidies in exchange for increased opportunities to sell corn and other farm products in Europe. Any agreement would apply to all GATT members, the sources said.

Kantor said the administration also isholding firm on another difficult issue, its insistence that any global trade agreement not weaken U.S. laws used to combat illegal dumping of imports at unfairly low prices -- a top priority of many U.S. business groups.

In Washington, Senate Minority Leader Robert J. Dole, R-Kan., and House Majority Leader Richard A. Gephardt, D-Mo., joined in an unlikely alliance to say they would work against a trade agreement that permits "unfair, predatory trade practices."

Kantor said the United States and the EC were close to settling their differences on reductions in industrial tariffs, and had made real progress on audiovisual services -- another key stumbling block.

The Europeans are demanding that television broadcasting and film productions remain exempt from GATT's restrictions on subsidies to help their film and TV industries survive overwhelming American competition.

Sources close to the talks say the United States may be willing to accept continued protection for film and broadcasting if future services such as pay-per-view broadcasting are open to foreign participation.

Thursday's reports of progress came after Clinton administration officials delivered a series of blunt warnings that any failure to reach a global trade accord could have a profound impact on U.S. security commitments in Europe.

European governments have been upset by the administration's linkage of trade and security, a connection that was taboo in the Cold War era when Americans and Europeans kept commercial rivalries from disrupting a military alliance that prized absolute unity against the Soviet threat.

But there is a grudging recognition in Paris, Bonn and London that the two issues can no longer remain isolated at a time when the United States and its European allies are struggling to restructure their economies and prune military budgets now that the danger of a Soviet invasion has vanished.

The GATT negotiations have missed two previous deadlines but all parties now acknowledge that the Dec. 15 target is a make-or-break moment since at that time the administration's authority to negotiate a package deal, immune to revisions by Congress, expires.