17 



A. The current Uruguay Round text on agriculture, as modified by 

 the Blair House agreement reached between the United States and 

 the EC, calls for a 20 percent reduction on an aggregate basis 

 over six years, using 1986-88 as the base. Direct payments that 

 are appropriately linked to production-limiting programs will not 

 be subject to the reduction commitment if certain conditions are 

 met (for crops: fixed acreage base/fixed yields or payments made 

 on less than 85 percent of base level production; for livestock: 

 fixed number of livestock head) . All Uruguay Round participants, 

 including the EC, must comply with these commitments. 



13. Q. It seems to me that past GATT talks have focused to 

 merge the US and EC farm programs and payments with hopes to find 

 level ground. In the US we have supply management, in the EC we 

 have production, production, production. Many of the grain 

 companies would like to see the US move toward production, 

 production, production. Some farmers and others are satisfied 

 with supply management programs and would like to see the EC 

 pattern their programs after ours. How do you see the 

 Administration approaching this? 



A. We view the Uruguay Round not as an exercise to harmonize 

 U.S. and EC agricultural policies, but as effort to reform 

 agricultural trade on a global basis. Considerable progress has 

 been made in developing multilateral rules and disciplines for 

 domestic support programs and agricultural export subsidies, but 

 more work is needed in the area of agricultural market access. 



