New Round of Talks on World Trade Approved

Trade ministers of the 90 member nations of the General Agreement on Tariffs and Trade ended a four-day meeting Thursday with firm agreement at last to launch a new round of world trade talks with a wide open agenda in September, 1986.

A preparatory committee will begin work in January “to determine the objectives, subject matter and modalities” for the negotiations, which will include the important services sector--banking, insurance, shipping and investment.

The preparatory work is due to be completed by July, and a ministerial meeting in September, possibly in Seoul, South Korea, will open the round of negotiations that could last three to five years.

“This will be the biggest, most comprehensive and significant round of trade negotiations in our history,” said GATT Director General Arthur Dunkel, a Swiss diplomat. “It will not only reflect the wider membership of GATT since the last Tokyo round, but also fundamental changes in the world trading pattern.

“There was a clear recognition by all governments at this meeting of the need for remedial action on the world trading system, and all governments are ready to try to create conditions for more trade liberalization, growth and jobs. The GATT partners have shown themselves capable of taking steps to get GATT back into dealing with substance, its real job.”

Only a week ago the outlook for this meeting was bleak. A group of experts tried for six weeks to come up with concrete recommendations for a preparatory agenda for a new round of talks but was deadlocked over the issue of services and could not agree on any reform at all.

At this point the United States began warning bluntly that if this meeting ended in failure, it could mean the complete eclipse of GATT, and the Reagan Administration would be prepared to “go it alone” on trade negotiations.

The fight to keep the services sector out of any new trade talks has been led for the last three years by Brazil and India. But the support they once had from other Third World nations has been eroding steadily. When this meeting opened, it was clear that if the United States wished to force a vote on the issue, it would win hands down.

But the agency usually operates by consensus rather than voting. The question was whether compromise language on the issue of the agenda for the talks could be found.

Adaptation Emphasized

In two brief but pointedly tough interventions during the four days of debate, Deputy U.S. Trade Representative Michael B. Smith declared that it was clear from the text of the agreement “that those who want to negotiate on services within the GATT are permitted to do so.”

Services, he said, have grown dramatically as an element of world trade, “and this institution must adapt itself to change or it is destined to become outmoded by changes in the sphere of activity that it is attempting to govern.”

Brazil, India and others have argued that any agreement to liberalize trade and services would open the developing nations to an invasion by big banks, insurance companies, investment houses and other such institutions, swamping their more limited resources.

Now these arguments at least will transfer into the framework of actual negotiations--instead of being used to block negotiations. The talks and the preparatory work in the next months will be “very serious, difficult and intense,” Dunkel said, adding with some relief, “But at last we have reached the substantive phase of pre-negotiations.”

In addition to the work of preparing an agenda for negotiations, another major hurdle will be the passage of new U.S. legislation to enable the United States to negotiate with its world trading partners.