Effort to Breathe Life Into Trade Talks Goes Nowhere

Attempts to jump-start the global trade talks in Geneva ended with little sign of progress Thursday, intensifying pressure on the United States and other nations to begin offering concessions soon to prevent the negotiations from collapsing at the end of this year.

The talks, being conducted under the aegis of the General Agreement on Tariffs and Trade, which administers world trading rules, are scheduled to resume in late August. They are intended to lay the groundwork for a final trade-opening agreement in Brussels in December.

Intensive bargaining is slated to begin in mid-October.

On Thursday, Arthur Dunkel, GATT’s director-general, blamed the latest setback in the talks, which began 3 1/2 years ago, on the refusal of participating governments to give their negotiators enough leeway to engage in real bargaining.

The 105-country negotiations are aimed at hammering out agreements to encourage freer trade in 15 separate areas affecting about $1.5 trillion in goods and services that cross national borders each year.

The key stumbling block in the negotiations is agriculture, where the United States and most other countries are demanding that Western Europe begin dismantling its highly protectionist system of farm subsidies and import quotas.

Other areas in dispute include textiles--where poorer countries are insisting that the advanced nations open their markets to more imports--and services, patents and investment, where the industrial powers want more access to Third World markets.

Without an agreement to reduce farm subsidies, the talks are likely to fail.

Developing countries are reluctant to agree to the deals that U.S. officials want on services, patents, copyrights and investment unless both Europe and the United States agree to end trade barriers in agriculture and textiles.

Dunkel said Thursday that trade-offs between the various areas under discussion have gone nowhere. “Up until now,” he said, such trade-offs “have been used negatively, with negotiators largely playing hide-and-seek with each other and not revealing their hand.”

U.S. officials also expressed disappointment that the talks did not make greater headway but said they still believe that there is time to forge a satisfactory agreement before the self-imposed December deadline. The delays should sound “a lot of alarm bells to the various governments. . .that the political decisions can’t all wait until Brussels,” a senior U.S. trade official in Geneva said in a telephone interview.

But negotiators “now know what the differences are,” he added. Nothing fundamental stands in the way of a deal “except political will.”

Dunkel’s statement at the end of the negotiating session made it clear how deep the differences are in several key areas. Without naming individual countries, he urged the United States to relax its position on textiles and to be more flexible on trade in services.

Although the farm subsidy issue remains the most serious dispute, it was barely discussed at this week’s session. U.S. and European officials reached an agreement just before the talks began on Monday to put off any substantive debate on the issue until late August.

But after dragging their heels for years, the Europeans finally expressed a willingness to consider their own agricultural trade barriers in negotiations over how to reduce subsidies in all three major areas of protection--domestic supports, export subsidies and import quotas.

In return, U.S. officials reined in their harsh attacks on the European farm program. The dispute produced public sparks earlier this month in Houston at the annual economic summit of leaders of the major industrial democracies.

“When you’re making more progress inside the room,” said the U.S. trade official, it makes sense “to lower the rhetoric level outside the room.”