FOCUS : Asia to Watch How EC Behaves in GATT Talks : Trade: Pacific nations are often accused of restricting food imports, but they say Europe is the worst offender.

When negotiations resume today in Geneva for a new General Agreement on Tariffs and Trade, the pact establishing the rules of international commerce, U.S. trade representatives and their counterparts from around the world are scheduled to address the two most contentious issues on the bargaining table--food policy and the business services issue.

Many of the U.S. government’s trade-related complaints have been directed at Asian nations. For example, the United States contends that American firms involved in construction, architectural and engineering services do not have enough access to Japanese markets. And the United States has accused South Korea of maintaining barriers to American firms involved in accounting and financial services.

As for food, the American trade delegation has made an issue of Japan’s prohibition on rice imports.

“It will require the exertion of some political will by all parties to resolve issues in these two areas,” said Tim O’Leary, a spokesman for the Office of the U.S. Trade Representative.

However, many Asian trade negotiators have a different perspective; they believe that the European Community is the great obstructionist on the food policy issue. They point out that GATT negotiations temporarily collapsed in Brussels last December after some European nations refused to lower subsidies that protect Europe’s food products. The talks resumed on other issues this spring.

The dispute arose again earlier this month when the ASEAN nations of Southeast Asia--Malaysia, Indonesia, Singapore, Thailand, the Philippines and Brunei--held separate discussion with representatives of the European Community. The ASEAN countries made a strong plea for a rapid conclusion of the GATT talks, blaming European farm subsidies for the delays in the negotiating process. ASEAN nations contend that the EC farm subsidies depress world food prices and make it difficult for developing countries to sell agricultural goods.

The ASEAN nations--led by Malaysia--have been touting the idea of forming an Asia Pacific trade bloc to counter what they fear will be increasing protectionism from trade zones being created by the European Community and the governments of North America.

The EC plans to form a single European market over the next two years by eliminating all trade barriers among its 12 members. The United States, which already has a free trade agreement with Canada, is trying to forge a similar deal with Mexico.

Under the Malaysian proposal, ASEAN nations would forge an East Asia Economic Group that would include Japan, South Korea and other Asian countries. Australia, New Zealand and the United States would be excluded.

Malaysia has contended that such a group could protect the financial interests of Asian nations should the GATT talks fail.

Japan has been officially cool to the notion of an exclusive East Asian group and is casting itself in the role as the great mediator. In a government white paper circulated this month, Japan said it was the only industrialized nation not promoting the kind of economic regionalism that could lead to the formation of exclusive trading blocs.

To head off economic blocs, it is essential to strengthen the GATT system’s “principles of free trade and mulilateralism,” the white paper concluded.

Trade Disputes With Asian Nations The United States is hoping many of its trade disputes with Asian nations will be resolved in the restart of the GATT talks. The following shows the U. S. 1990 trade deficit with East Asian nations and a summary of the U. S. government’s grievances with each country.

COUNTRY DEFICIT COMPLAINTS OR ISSUES Japan $41.1 billion Investment barriers Service industry barriers Quotas and high tariffs Exclusionary practices Taiwan $11.2 billion Restrictive import licensing Monopolistic practices Investment barriers China $10.4 billion Restrictive import licensing and product bans High tariffs Intellectual property rights violations Investment barriers South Korea $4.1 billion Discriminatory pricing and certification standards High tariffs Investment barriers Thailand $2.3 billion High tariffs Export subsidies Intellectual property rights violations Malaysia $1.87 billion High tariffs on food, wine and tobacco Investment barriers Service industry barriers Singapore $1.8 billion Barriers to telecommunications industry Indonesia $1.5 billion High tariffs Investment barriers Intellectual property rights violations

Source: United States Trade Representative.