Soviets in GATT?
Historians may record the Soviet Union’s bid for participation in GATT, the free world’s major forum for trade negotiation, as one of the major events of the late 20th Century. But that is a long shot. Realistically, members of the 92-nation General Agreement on Tariffs and Trade are justified in reacting with caution and skepticism.
GATT was created in 1948 to promote higher living standards and world economic growth through the orderly liberalization of world trade, with emphasis on dismantling tariffs and quotas. The going has been rough, but on balance the agreement has been successful.
The eighth round of GATT negotiations will get under way next month in Punta del Este, Uruguay. The focal point of the talks, which may last four or five years, will be the U.S. demand for fair-play rules governing trade in such services as banking, insurance, shipping and telecommunications.
The Soviets have been testing the waters for three years. Last week Moscow went public. The Soviet Union said that it wanted to participate in next month’s GATT meeting as a first step toward membership. The United States and other Western governments are understandably dubious.
The whole idea of GATT is to promote multilateral liberalization of trade. But tariffs and conventional quotas are not the problem in conducting trade with the Soviet Union, which pursues the ultimate in protectionist policies.
In essence, the Soviets maintain a zero-access quota on imports of everything; all purchases abroad result from authorized exceptions. Under the system of central planning, no Soviet enterprise can buy so much as a paper clip from the West unless the purchase falls within the frame-work of transactions approved by the authorities.
Thanks to a bending of GATT rules, several communist countries already are members of the organization. Because of its greater size and potential effect on the world trading system, the Soviet Union would be more difficult to accommodate in the absence of fundamental changes in the way it does business.
According to GATT officials contacted by the Russians, Moscow says that its interest in GATT membership is prompted by “prospective changes in Soviet foreign-trade mechanisms” and a desire to broaden trade between the Soviet Union and GATT members.
There are also hints that the Soviet initiative toward the trade negotiating organization may be tied to Soviet leader Mikhail S. Gorbachev’s widely advertised interest in reform of the rigid, tightly controlled Soviet economy. If the Soviet bid to join GATT is a signal that the Soviet Union wants to join the real world, it is an initiative of historic potential importance--one that should be welcomed by the outside world.
But while the idea of ultimate Soviet membership should not be foreclosed, the cautious reaction of the United States and other Western governments is appropriate. There is concern that Soviet membership would politicize GATT, as other U.N. agencies have been politicized, by bringing in a destructive element of East-West confrontation that so far has been missing.
It is really up to Moscow to demonstrate first that changes in “Soviet foreign-trade mechanisms” are real, not just prospective. Until that happens, anything going beyond a passive Soviet role in GATT would be inappropriate.