EC-US agricultural trade relations: do political compromises exist?

The history of EC-US conflicts about the Common Agricultural Policy is long and rich in events. Naturally, the opposing views on agricultural policy reforms in the EC and the US have reached a climax in the GATT negotiations of the ongoing Uruguay Round. The basic position of the US is in favour of a complete elimination of farm support policies as long as they are linked with production levels, while the EC is keen on trading a commitment to a limited cut in price support for a rebalancing of its tariff structure in favour of imported feeds. In this paper, we do not intend to review all the issues related to the EC-US agricultural trade conflict. We should like however, to address three questions: Why is the conflict so intense, while evidence exists that the size of interaction is real but not considerable? Why is the EC reluctant to liberalise while the economic gains are large and, correspondingly, why is the US position led only by a quest for the welfare efficiency of free trade? Can we reveal the actual policy objectives embedded in the current farm programmes, and by doing so identify areas for mutual agreement? In the first section we shall analyse three paradoxes in the EC and US positions in the current GATT round of negotiations. In the second section we shall present estimates of the relative political weights for various social groups affected by the current programmes. The resulting political value function will then be used to delineate areas for feasible compromises. -from Authors