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Agricultural trade conflicts have escalated as major western economies have begun to subsidize their farm exports in an effort to gain or retain market shares. At the heart of this agricultural trade conflict is the escalating subsidies race between the United States and the European Economic Community. Total US farm exports soared in just ten years (1971-1981) from $8billion to $45 billion (Figure 1). Since then they fell dramatically to $28 billion in 1986. Simultaneously, the Economic Community expanded its value of agricultural export trade from $5 billion dollars in 1971to $28billion in 1981. By 1986, the EEC value of world agricultural export trade had fallen to $25 billion. In wheat, the high point of American exports was 1973-74 when the United States accounted for almost 50 percent (metric tons) of the world wheat market (Figure 2). In 1985-86 the US share had dropped to 29percent. In 1973-74, the Economic Community had an eight percent share of the world wheat market,but by 1986-87 it had increased its share to slightly more than 18 percent. These agricultural trade conflicts have brought the world's major agricultural producers to the General Agreement on Tariffs and Trade^ (GATT) bargaining table. Two of the major players have offered radically different proposals. The European Economic Community's (EEC)^ proposal is unacceptable to the US negotiators, while the United States' (US) proposal is unacceptable to European Community negotiators. The purpose of this paper is to discuss the origins of these trade conflicts, to examine the differences between the two proposals being considered to relieve these conflicts, and to consider the likely impacts of these proposals on North Dakota agricultural producers.



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