Trade-Pact Need: More Trade-Offs : Go back to the Brussels table and start dealing

Salvaging world trade talks will be no easy task but Western nations owe developing countries at least one more try to get the four-year effort to free up trade back on track.

The talks disbanded in bitter disarray and uncertainty in Brussels early this month because of disputes on agriculture. It’s time to stop the finger-pointing. The ugly specter of retaliatory trade measures should be more than enough to get negotiators back to the bargaining table for the Jan. 15 meeting called by Arthur Dunkel, director general of the General Agreement on Tariffs and Trade.

THE KEY ISSUE: The meeting offers a window of opportunity to save the talks, which began in Uruguay in 1986, from total collapse. So far, none of the participants are wildly enthusiastic or optimistic. What’s needed now to jump-start the talks is a more conciliatory tone and approach by both the United States and the European Community. Each has blamed the other for the breakdown of talks on agriculture--the key issue to wrapping up new rules to cover 15 trade categories, including services, intellectual properties and financial services.

When EC leaders met in Rome on Dec. 14-15, they expressed regret about the stalled talks but pointedly did not offer anything new. A few days later, U.S. Secretary of State James A. Baker III cast an ominous light on the suspended talks. “There are potentially very dangerous implications here--for Europe, for America, indeed for the rest of the world--that could lead to a breakdown of the world trading system,” he said last week at the end of a NATO meeting of foreign ministers.

Stop the rhetoric and get down to business. The United States has stubbornly clung to its demand to cut food supports by at least 75%. The EC, yielding to the political will of its powerful farmers, has stood firm by its offer of the equivalent of only a 15% cut. Each should put new proposals on the table.

THE KEY OBSTACLE: The United States needs to acknowledge and accommodate EC farm policies that have traditionally provided a special role for farmers in the social fabric of Europe. Indeed, similar though horrendously expensive farm programs among EC members help to unify the otherwise disparate countries. A drastic dismantling of these policies would be unsettling given normal circumstances, let alone now with drastic and uncertain changes in Eastern Europe. A more moderate U.S. line would show that this country is not out to kill off a way of life.

The EC has been accused of sabotaging the talks. True, the group backed off at the last minute in Brussels from an informal proposal to cut internal farm supports and export subsidies by 30%. Now the EC needs to demonstrate good faith with a new proposal to dispel renewed fears that it will become fortress Europe in 1992 when the EC becomes one market.

Perhaps the best deals are cut by the toughest negotiators. But a game of brinkmanship in trade may end with everyone losing. The stakes are too high.