Baldrige Reacts to France’s Opposition to Global Talks : U.S. May Seek Bilateral Trade Pacts

Warning that continued French resistance to new global trade talks will make protectionist measures by Congress “much more likely,” Commerce Secretary Malcolm Baldrige said Monday that the Reagan Administration would push for bilateral trade agreements if the multilateral talks next year are blocked.

Baldrige, who spoke with reporters at a breakfast meeting, soft-pedaled the Administration’s annoyance with French President Francois Mitterrand’s veto at last week’s Bonn summit of a specific date for a new round of trade negotiations. He said merely that he hoped preliminary talks scheduled for late summer would clear the way for a new round of talks in 1986, which the United States has been urging for more than a year.

But Agriculture Secretary John R. Block, who has urged a harsh policy of retaliation against European agricultural protectionism, told reporters bluntly later in the day that the French position caused him “frustration and distress.” The Administration, he hinted, might be on the verge of striking back with another major sale of subsidized wheat or some other agricultural commodity to Egypt or another market normally dominated by France.

“I don’t have a target for you and I don’t have a specific commodity, but I think we have exhausted our diplomatic efforts,” Block said. “We’re going to have to look seriously at some type of effort to sell products in competition, particularly with the French.

No Trivial Matter

“A couple of years ago, we virtually took the wheat flour market in Egypt away from France,” said Block, alluding to the United States’ 1983 sale of nearly a million tons of wheat to Egypt at $25 a ton below market price. “This is a bigger issue than just a bushel of wheat or a few chickens, because we’re really talking about something that needs to be done, and that’s reform and discipline in international trade.”

Although Baldrige was far less confrontational in his remarks, his message carried a clear warning as well. If the preliminary talks this summer produce an agenda, “there is no reason why we shouldn’t have a trade round in 1986. But there is a reasonable chance that if we get tied up in delays on the preparatory talks, the pressure in Congress for protectionism will intensify.”

Further, he noted, “the pressures that will rise if we don’t see a new trade round will all work toward the United States making bilateral agreements. If we can’t have a multilateral agreement, then we will have to act bilaterally.”

For the United States to make its own trading arrangements with other advanced nations--such as those in progress with Japan--”would not be in the best interests of the developing countries” because “they are concerned about having their disadvantage in service industries and in high technology frozen into place to the advantage of the United States and Japan,” Baldrige said.

But if there are no new trade rules on technology and services “and if we start making more bilateral agreements--it’s the developing countries that will be hurt the most,” he added.

Mitterrand had expressed his objections to a 1986 round of trade talks on behalf of Third World nations, but Baldrige made it plain that he believes that France, too, fears new international trading rules that would lock in place U.S.-Japanese superiority in high-technology and service industries.

“It’s clear Mitterrand wants to protect” the Common Market’s agricultural policy, he asserted. The French do not want a formal round of talks now, he added, “because they are worried about their farmers and worry about catching up in high technology and services.”

Heading for Moscow

Baldrige spoke on the eve of his departure this week for Moscow to head a U.S. delegation to the first trade talks with the Soviets in six years. The only likely area for agreement in those talks, he stressed, is expanded trade in non-strategic, non-controversial consumer goods, processed foods and similar commodities.

Baldrige minimized persistent reports that his negotiating mandate in Moscow during the May 20-21 talks had been sharply curtailed at the insistence of Defense Secretary Caspar W. Weinberger, who reportedly urged that the trip be canceled.

“There is no change in my plans for a trip to the Soviet Union,” Baldrige said. Trade in high technology and other goods with strategic significance “is governed by rules which we will explain we are not going to change on this trip, and the Soviets know that and understand that.”