GATT Members Approve Soviets’ Observer Status

With the backing of the United States, the Soviet Union won observer status Wednesday in the Geneva-based organization that sets and administers world trading rules--an important step in Moscow’s efforts to begin normal economic relations with the West.

The unanimous vote by the 97-country General Agreement on Tariffs and Trade represents an acceleration of the timetable set by President Bush, who had promised the action some time next year. Washington relented after other countries pressed for an early vote.

The move comes just two weeks before Bush and Soviet President Mikhail S. Gorbachev are scheduled to hold their second summit conference. Barring a Soviet invasion of Lithuania, the two are expected to sign a U.S.-Soviet trade accord opening the way for lower tariffs on Soviet goods.

Although the United States agreed to the faster timetable more than a month ago, U.S. officials said Wednesday that Washington also wanted to use the GATT action to send a positive signal to the Soviets before the summit.

“I think there’s a general desire to see the summit go well,” one policy-maker said.

Even so, U.S. and Soviet officials acknowledged that the granting of observer status to Moscow is primarily symbolic. For example, the Soviets will not be able to vote or to take part in the global trade liberalization talks now under way.

And it could be years before Moscow is finally admitted as a full-fledged GATT member. GATT Director General Arthur Dunkel noted that, for the moment, the Soviets will be there mostly to learn. Observer status, he said, is “completely different from membership.”

Thirty-six countries hold observer status in GATT, including China, whose application for full membership was put on hold after the Tian An Men Square crackdown in Beijing on pro-democracy students last summer.

Moscow has been seeking GATT membership--or at least observer status--since the early 1980s. But until recently the United States had flatly rejected the idea for fear that Moscow would disrupt the organization politically.

Bush changed his mind after Gorbachev began moving to end the Cold War, promising at the first meeting between the two men in Malta last December to go along with observer status for Moscow after the current global trade talks end later this year.

Moscow also has expressed interest in eventually joining other international organizations such as the International Monetary Fund and the World Bank as part of its integration into the international monetary system.

But U.S., European and Japanese officials have cautioned that any such actions should wait until the Soviets have made more progress toward creating a market-oriented economy. Other non-market countries are members of GATT, but they have difficulty meeting some rules.

Western officials say the primary benefit of GATT observer status for the Soviets will be the opportunity to see how the global trading system works and to take advantage of GATT experts’ advice in devising Soviet trade laws.

To become a full-fledged member of GATT, a country must adopt a series of policies designed to open its market to foreign competition and agree to abide by GATT rules governing international trade. The move to full membership usually takes several years.

The White House had been under pressure from some lawmakers to block the granting of observer status to the Soviets in retaliation for Moscow’s blockade of Lithuania. But Bush rejected such pleas, arguing that any such action might force Gorbachev to harden his stance.

Under GATT regulations, the Soviets will have no vote. Also, the Soviet delegate will not be allowed to speak until the rest of the organization’s 97 members have had their say.

BACKGROUND

It isn’t exactly a household word, but the General Agreement on Tariffs and Trade is the premier international organization that watches over world trade. Established ostensibly on a temporary basis in 1947, the Geneva-based GATT is a 97-country compact that sets and administers trade rules. Its latest undertaking is to serve as host for the Uruguay Round, the global trade-liberalization talks that are seeking to overhaul the world trading system.