Yeutter Takes Tough Line on 92-Nation Trade Talks

The Reagan Administration’s top trade official on Wednesday bluntly served notice on U.S. trading partners that efforts by a small group of “intransigent” nations to sidetrack American trade objectives could torpedo a new round of global talks.

Special Trade Representative Clayton K. Yeutter, in a speech to the U.S. Chamber of Commerce, said efforts at next week’s 92-nation conference in Uruguay to launch a new trade round might collapse. Such a new series of talks would be the eighth of their kind since the end of World War II.

“I hope we don’t have to walk out in Punte del Este,” Yeutter said. “We hope people (there) will be reasonable and rational. But we certainly are going to take a very strong and aggressive line.”

He predicted “long days and short nights” at the weeklong conference, to be held in a vacated hotel gambling casino at the seacoast resort city.

List of ‘Must’ Items Reduced

At the same time, the chief U.S. trade negotiator indicated that the United States had reduced from five to four its list of “must” items for the Sept. 14-19 conference of the General Agreement on Tariffs and Trade (GATT).

The four items that the United States demands for any new trade round, Yeutter said, are: phasing down government agricultural subsidies; broadening GATT rules to cover trade in services, such as banking; a liberalization of foreign investment rules, and a new code to clamp down on counterfeiting and copyright piracy.

“There are no throwaways. We intend to get them all,” Yeutter said.

However, speaking with reporters after the speech, he indicated that the United States would not boycott a new trade round if next week’s session fails to make progress on a fifth key U.S. objective: strengthening the GATT process for settling disputes.

Earlier in the week, Yeutter had told a news conference that all five objectives were “big-ticket items” that the United States would insist upon before it would agree to participate in any new round.

Walkout by U.S. Possible

Although the United States considers the current dispute-settlement process ineffective, the Punta del Estes session may be the wrong forum for pressing demands for strengthening these rules, Yeutter said.

“That’s in somewhat of a different category,” he told reporters.

The Administration has long pressed for a new round of trade talks to update the GATT rules. This week’s comments by Yeutter and other Administration officials, raising the specter of a “walkout” at the preliminary talks, reflected increasing pessimism among U.S. officials about prospects for a successful conference.

In his prepared remarks, Yeutter accused “a small group of nations” of seeking to sabotage the Uruguay conference.

“Nations that engage in three or four percent of the world’s trade cannot be allowed to jeopardize the future of the entire world trading system,” the prepared statement said. Yeutter did not repeat that phrase in the remarks he actually delivered Wednesday. But when asked about the prepared comments by a questioner in the audience, he said he had not intended to include France in his criticism.

“I don’t look for France to jeopardize the world trading system,” Yeutter said. “That was not aimed at our friends in France--but at other countries which I think you can readily identify.”

Within the past few days, Yeutter on several occasions had attacked France for its opposition to including agricultural trade in any new round of trade talks.

But Yeutter indicated Wednesday that he was speaking mostly of a group of 10 developing nations, led by Brazil and India, which have opposed U.S. demands to broaden world trade rules to include services and investments. He called those nations “intransigent” and said their actions were “inexplicable and indefensible.”

Yeutter claimed that the future of the world trading system hinges on the meeting at Punte del Estes. He said a collapse of next week’s talks would lead to increased protectionism throughout the world.

“This is a very critical time in the annals of world trade,” he said.

Aides said Yeutter’s speech was intended to establish a tough U.S. bargaining position for the conference. The U.S. delegation will also include Commerce Secretary Malcolm Baldrige and Agriculture Secretary Richard E. Lyng.