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SEVEN ROUNDS of trade talks since the end of World War II have contributed to worldwide prosperity by lowering the barriers to trade. Now the eighth, the "Uruguay round," has been suspended amid acrimonious argument and doubts that anything can be salvaged from the wreckage.

One reason for the stalemate in the 107-nation talks is that the objective this time was more ambitious than in any previous round -- to put agricultural products under international agreement for the first time. In the final showdown, the political will was lacking to attack the system of subsidies that distorts trade in farm products.

The world's major industrial nations spent $250 billion last year in subsidies to their farmers. Two-thirds of the budget of the European Community consists of farm subsidies. Such subsidies create tremendous burdens on other sectors of the economy, and they create farm surpluses that are then dumped on world markets.

The United States offered, in return for a reduction in the farm subsidies, to make concessions in other areas, such as manufactured goods, banking, telecommunications and textiles. But when the EC farm concessions proved inadequate, the entire package fell apart, and the talks were suspended. In the end, the political power of the 10 million EC farmers proved too much.

The hard negotiating line taken by the United States was better than yielding at the last moment and accepting a largely meaningless agreement. The interests of all the participants will best be served by hammering out a major new trade pact that includes farm products for the first time.

Fear of economic recession around the world contributed to the hesitancy of some nations in taking bold, new initiatives. But they should also fear the consequences of not taking such action. If the talks finally fail, increased protectionism and trade friction can be expected. It is frightening to recall that rampant protectionism in the 1930s helped to deepen the effects of the Great Depression.

Few expect outright trade wars, but the economic giants -- the United States, the EC and Japan, could be expected to protect their own interests and retreat somewhat into their own trading blocs.

The United States has several trade complaints that it has been sitting on pending the outcome of the trade talks. If the talks fail, it would process these under existing international agreements.

Fortunately, there is still hope that the negotiations, which have been going on for four years, can be salvaged. The talks will continue in Geneva with lower-level officials, and, after a cooling-off period, there may be opportunities for new decisions at the highest level.

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