New Conflicts Threaten GATT as Talks Enter Final Stretch : Trade: Aircraft, entertainment remain key sticking points. Europe accuses the U.S. of backtracking.
The 116-nation world trade talks enter a critical phase this weekend, with political pressure nearing a boiling point and more rather than fewer unresolved issues bubbling to the surface.
With the central players--U.S. Trade Representative Mickey Kantor and Leon Brittan, his counterpart representing the European Community--about to resume their marathon to reach an agreement, a senior U.S. negotiator said Friday that he was “concerned but not gloomy” about the prospects for completing the talks by the Wednesday deadline.
However, amid European accusations that the United States is backtracking, the U.S. official said division over government support for two industries--aircraft and entertainment--remains deep enough to threaten the entire agreement. Those industries are the largest U.S. exporters, with foreign sales of $34 billion and $17 billion, respectively.
The pattern is becoming distressing for advocates of an agreement, as one contentious issue is resolved only to be replaced by another.
On Friday night, for example, Chancellor Helmut Kohl of Germany told reporters here that “there are major problems in textiles.” Portugal, Spain, Italy and France objected to terms that have already been negotiated by the European Community, the 12-nation group to which they all belong, Kohl said.
But in Washington, Kantor sounded a more optimistic note than was heard in Europe. “The odds have certainly shifted in favor of a successful completion, but we’re not there yet,” he said.
After seven years of negotiations, the trading partners’ goal is to complete--under the 46-year-old General Agreement on Tariffs and Trade--the most massive redesign of the world’s trading rules ever attempted.
If achieved, economists estimate, the one-third reduction in the world’s import tariffs, cuts in quotas and the removal of other obstacles to international commerce would provide a $270-billion annual kick to the value of the world’s economy by the year 2002. This growth, analysts say, would provide jobs to recession-weary Europe and Japan and add muscle to the stronger U.S. economy.
One day before Kantor planned to resume his meetings in Geneva, two central figures in the consideration of any trade issue in Congress delivered a pointed message to trade ambassadors there, including the team from Washington.
House Majority Leader Richard Gephardt (D-Mo.), who last month opposed the North American Free Trade Agreement, and Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, through which trade legislation must pass, emphasized the importance of maintaining U.S. regulations that protect American industries from the below-cost dumping of foreign products.
Their political message was delivered in private meetings with Peter Sutherland--who, as director general of GATT, is the referee of the global talks--and to other countries’ negotiators.
But a Clinton Administration official said it was directed just as much at the negotiators from Washington, to buck up their resolve to resist pressures to chip away at the U.S. anti-dumping laws that have long been a point of contention with trading partners.
Kantor and Brittan, the European Community’s external affairs commissioner, plan to resume their negotiations today in Geneva, with the ambitious goal of hammering out an agreement, however much unfinished, by Sunday night.
But the equation, in which progress on one issue is linked to progress on all the others, has left those close to the talks uncertain whether the details can be negotiated in time.
“There are two or three issues which are floating round, interlocked in a complicated relationship,” said a senior U.S. diplomat in Brussels.
Newly thrown into the debate is the question of government support for local maritime industries and differences over limits placed by the United States on the size of the foreign role in U.S. shipping.
The surfacing of this issue has raised tempers in recent days in Washington, Brussels and Geneva, as the negotiators seek a goal that has eluded them since the talks began in Uruguay in 1986. Fuses have grown short too in disputes over aircraft business and pressure to open foreign markets to such financial service institutions as banks and insurance companies.
A senior EC official said the Administration had grown inconsistent and increasingly difficult to negotiate with. Speaking on the condition of anonymity, he said the Administration had pulled back in the past week from agreements on aviation and shipbuilding and was “bludgeoning” the Japanese to open their financial markets to foreign participation by raising the unlikely threat of withdrawing Japan’s status as a trading partner entitled to the low tariffs offered under “most favored nation” procedures.
“They’re not behaving the way we think they should,” he said.
But Kantor was adamant. “We will not sign a Uruguay Round agreement that doesn’t preserve our anti-dumping laws,” he said. “We are . . . critically interested in opening up the Japanese financial services market. . . . We’re not satisfied yet.”
Times staff writers Tyler Marshall in Brussels and Mark Bousian in Washington contributed to this report.
