A Political Harvest at the Geneva Talks? : GATT Looks Less Sickly After Houston

As the Houston economic summit glitter fades and the controversies subside, the world stage for the contentious trade issue of agriculture shifts to Geneva. But now it moves there not under the usual cloud but for the first time under a ray of hope.

Significantly, the leaders of the seven leading industrialized nations agreed in principle to cut down to size of the obnoxious system of farm subsidies that threatens to poison world trade and utterly undermine the all-important round of trade talks.

But now they resume in Switzerland with every reason to hope that a detailed new trade accord can be hammered out by December, when the current round of the General Agreement on Tariffs and Trade talks are scheduled to conclude. At the top of the agenda is the absurd system of agricultural subsidies that costs taxpayers and consumers in the developed world alone $245 billion annually.

The Administration was absolutely splendid in its persistence on the thorny issue of agricultural reform, which is crucial if other changes in trade practices are to be achieved. President Bush has made open and free trade a top economic priority and evidently he made a strong case in Houston.

The GATT talks are aimed at expanding trade through new rules that embrace agricultural reform, while imposing regulations for the first time on the exchange of services, investment and intellectual property such as patents, trademarks and copyrights. To be sure, progress on phasing out America’s own farm subsidies and price supports is the necessary quid pro quo for rich countries to gain cooperation from poor countries. If our protectionist farm policies prevent Third World countries from competing effectively, they won’t accept rules safeguarding Western patents, trademarks and copyrights.

If the talks fail to arrive at a consensus, what would be the result? Quite possibly trade chaos and economic turmoil worldwide. Worst yet, vile regional trading blocs dominated by Europe, Japan and the United States could emerge.

The aim of the trade talks is to blur borders, not create new ones. The United States should want to help realign the world according to common economic interests instead of along outdated military and ideological lines. A level playing field should help all nations. Current farm policies siphon off billions that are used to protect the status quo instead of being used to energize economies.

Europeans, for example, help subsidize their farmers to the tune of $100 billion a year. U.S. policies shield sugar and diary farmers. The Japanese ban rice imports entirely. It’s time to end this antiquated nonsense.

The agreement at the Houston economic summit did little to resolve specifics on agricultural reform, but it provided the political impetus to get stalled GATT talks going again. More important, the leaders went home with an international commitment to make some changes at home, knowing full well the political risk involved. The question is which changes and how fast.

The Houston compromise was based in part on a plan worked up by Aart de Zeeuw, chairman of the agricultural negotiating committee at GATT. His recommendations include a ceiling on internal supports, converting all border measures to tariffs and the eventual elimination of export subsidies. The De Zeeuw approach was only a beginning--but it was a good one indeed. A successful conclusion of the GATT talks would yield a desperately needed new framework for world trade.