A Nervous Countdown on Trade
Trade diplomacy is proving almost as nerve-racking as talks on nuclear arms control. Last Friday, the United States and the European Union appeared to be on the verge of a major breakthrough in world trade talks; by Monday, prospects had turned grimly uncertain.
After seven long years of talks, and with most of the developed countries now mired in recession, failure to reach an agreement would produce dire consequences that include a dark retreat into protectionism. At stake is a more open trading system involving 116 nations, all of the world’s major democracies among them. Such a system is needed to jump-start global economic growth.
Times staff writer James Gerstenzang aptly has called the negotiations “the financial equivalent of nuclear arms controls.” Indeed, in the post-Cold War era, international commerce has become a priority around the world.
The trade talks, under the auspices of the General Agreement on Tariffs and Trade, began in Uruguay in 1986 and now are fast approaching the Dec. 15 deadline set by Congress when it granted the White House the special negotiating authority known as “fast track.” Under the fast-track authority, Congress may not amend any trade agreement that is reached; rather it can only vote “yes” or “no.”
The goal of the GATT talks is to come up with global trading rules that for the first time embrace agricultural products, financial services and intellectual properties. A GATT agreement would extend a NAFTA-like system to all the participants.
A major sticking point in GATT has been the effort to reach agreement on the trade in agricultural products between the United States and the EU, particularly France.
The United States is said to be willing to compromise by agreeing to delay cuts in subsidized French wheat exports. In return, Americans would get greater access to European markets. Good compromise.
Another problem is France’s desire to continue to subsidize its film industry and to continue to limit the importation of American films. That unreasonably limits Hollywood’s access. The French must compromise.
Finally, the United States, wrongly, is trying to water down a GATT proposal on “anti-dumping” laws. Many countries, including the United States, invoke the existing laws for protectionist aims under the guise of verifying that imports are being illegally sold below cost. The GATT proposal would prevent such abuses. U.S. negotiators should seek to maintain, not compromise, the integrity of anti-dumping laws.
The countdown to Dec. 15 is on. French officials have indicated that there has been “excessive optimism” about the progress of the talks. However, France’s huffiness should be seen as just a minor setback. All of the 116 countries participating in the GATT talks stand to benefit in the long term with a new world agreement--and that includes France.