Clinton Tries to Jump-Start Trade Talks : Commerce: He meets with European Community official in effort to break deadlock on GATT accord.


The Clinton Administration, hoping to build on its success with the North American Free Trade Agreement, this week began shifting to broader trade issues, including efforts to conclude long-stalled talks over global trade by the end of the year.

U.S. Trade Representative Mickey Kantor resumed negotiations with Leon Brittan, trade commissioner for the European Community, aimed at breaking a logjam over farm subsidies and other U.S.-European disputes that have stalled progress on the global effort for years.

Brittan met with President Clinton briefly at the White House on Tuesday. Kantor and Brittan told reporters that they plan further talks next week in Brussels to try to meet a U.S.-imposed Dec. 15 deadline for an agreement to rewrite the rules of global commerce under the General Agreement on Tariffs and Trade.

This week's bargaining came just days after Clinton and Asian leaders met at the Asia-Pacific Economic Cooperation forum in Seattle, where the President pushed hard for open trade in the Pacific Rim. He also won the support of Asian nations for a final push on the global accord, a move that puts increased pressure on the Europeans to compromise.

Negotiators of the so-called Uruguay Round of GATT talks, involving more than 100 nations, began talking seven years ago. Many observers fear that if the talks are not concluded this year, they may break down permanently.

White House authority to negotiate the agreement expires under a congressional mandate Dec. 15. Congress has already approved two extensions of the talks and is not likely to grant a third, especially given the recent controversy over NAFTA.

The talks require a leap of faith by the Western world. They call for the West to reduce tariffs on manufactured goods from newly developing nations in return for greater market access in the Third World for the modern services and high-tech products sold by industrial powers such as the United States, European nations and Japan.

In effect, the proposed accord recognizes that low-wage, unskilled labor in the Third World will gradually displace American, European and Japanese workers in providing basic manufactured products to the world, while workers in the industrial powers focus on high-value-added products and services.

The global tariff reductions, for instance, would expose steel makers in industrial countries to greater foreign competition. At the same time, they would aid industrial nations by requiring countries to relax such rules as those limiting the amount of foreign-produced programs that a television network may show and those governing cross-border financial services.

The economic slowdown that has hindered most of the developed world over the last few years leaves many nations reluctant to plunge directly into a new world of free trade, even if they are philosophically committed to the concept.

Yet the accord's proponents argue that open trade would spur exports, in turn promoting economic growth as sales increase while prices fall.

Economists predict that the accord would produce an increase in the value of global economic output of $270 billion over 10 years. According to an estimate by the U.S. International Trade Commission, relaxing restraints on U.S. imports in 44 sectors could reduce prices by up to 11.4% in some areas and by an average of 3% across those parts of the economy.

Agricultural issues are among the most visible--and thorny.

French officials have said they no longer can stick with an agreement reached in November, 1992, by the United States and the 12-member European Community, to which France belongs.

Under that agreement, the amount of European grain exports and food given government subsidies is to be reduced by 21% over six years. The United States has refused to relax the agreement, either by trimming the limits on subsidies or by stretching out the period during which the cuts would be phased in.

Breakthroughs are not expected until the closing days of the global talks in Geneva.

Brittan was to meet with Clinton at the White House on Tuesday evening, but no announcements were expected. The European delegation greeted Clinton's involvement with optimism, reading it as a signal of White House commitment to the difficult task of working out the details that will lead to a final pact.

"It's an indication he's becoming personally engaged," said a European diplomat close to the talks. "What's required is a major political decision taken at the highest level."

Added the diplomat: "This gives us an opportunity to emphasize the importance of GATT compared with a relatively small agreement like NAFTA or a loose arrangement like APEC."

His characterizations of NAFTA and the Asia forum reflected the European belief that the global trading talks are much more important. Europeans are concerned that the United States is shifting its economic attention to the Pacific and Latin America--at the possible expense of its longtime trading partners across the Atlantic.

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