Brussels,Friday

HOPES of a world trade deal between the EC and America suffered a new

setback tonight as France signalled it would not compromise in the row

over farm subsidies.

French Agriculture Minister Jean-Pierre Soisson made it clear it was

up to the Americans to give ground, saying France would take all steps

necessary to protect its farming interests.

His comments suggest a French veto over the rest of the EC if a

majority of member states back any new deal reached when European

Commission negotiators re-start the Gatt talks in Washington next week.

The French stand is a setback for EC agriculture commissioner Ray

MacSharry, who has said he is confident of an agreement after winning a

power struggle with Commission President Jacques Delors.

Mr MacSharry rejoined the Gatt negotiating team this week after

previously standing down because of alleged interference by Mr Delors.

French farm subsidies now hold the key to a deal, with the US

demanding cuts in EC support for oilseed producers and in the volume of

food exported by the Community.

Mr MacSharry will plead with France at a meeting of EC Agriculture

Ministers in Brussels on Monday in an effort to improve his negotiating

hand.

But Mr Soisson, in a speech in Toulouse, warned that France would

''would bring to bear all the legal means available to assure

fundamental French farming interests are respected''.

He accused the US of showing ''no shame, no ethics, no morals'' in the

dispute over farm subsidies.

He said the Americans were defending their farming interests ''and I

don't see why I shouldn't defend the interests of our farmers.''

The speech provides Mr MacSharry and fellow EC negotiator Frans

Andriessen with another diplomatic hurdle to clear before the six-year

search for a new world trade order comes to an end.

In Edinburgh yesterday, Colm Larkin, an aide to EC Farm Commissioner

Ray MacSharry, said: ''Mr MacSharry and Frans Andriessen, who are flying

out to Washington next week, believe there is a very good chance of an

acceptable settlement by next Wednesday or Thursday.''