US asked to reduce goals for next GATT meeting
Gaston Thorn, president of the Commission of the European Communities, has a message for the White House: Don't expect too much from scheduled high-level trade talks in Geneva next month.
The United States, Mr. Thorn says, should lower its expectations that the November meeting of ministers from countries that have signed GATT will solve any of the major problems facing the US and its European trading partners. (GATT is the General Agreement on Tariffs and Trade, the basic regulation framework for world trade.)
David Mcdonald, the deputy US trade representative, issued a sharp reply in a Washington interview: ''I'm sorry that the good president (Mr. Thorn) does not have the breadth of vision to see that these multilateral issues are important when the world system is in disarry.''
He added the US would press for progress on the major trade issues anyway. ''The very factors that Mr. Thorn cites requiring us to lower our expectations cause us to gird our loins to achieve our original expectations.''
Mr. Thorn, who spoke here Sept. 29 at the Women's Economic Round Table, a national organization of influential women, also said the attempt by William Brock, the US trade representative, to include services, communications, and agricultural policy in the November meeting was likely to be unsuccessful.
Rather, he said, the US should aim for a ''less ambitious'' program, since the trading partners cannot afford to have the talks end without some success.
''To have it end in a failure would be counterproductive,'' Mr. Thorn said, ''since it's important that people continue to believe in GATT.'' Although Mr. Thorn said he is not enthusiastic about the meeting, he said it would be a mistake to cancel it now.
The possibility of confrontation comes at a time when there are major problems between the US and the European Community (EC). These problems include the question of EC agricultural policy, the current rift caused by US sanctions on firms supplying equipment for the Soviet-European natural gas pipeline, and disagreements over steel issues.
The US steel industry is operating at only 40 percent of capacity, its lowest production level since the Great Depression. At the same time, steel imports have been relatively strong. European steel mills are operating at 58 percent of capacity. A strong dollar has helped imports, but US manufacturers say steel is still being dumped on the US market at unfair prices.
On Sept. 30, for example, Dennis J. Carney, the chairman of Wheeling-Pittsburgh Steel, charged that over the past three months $2.2 billion in government aid had been provided for West German and Dutch steelmakers. Mr. Carney said he couldn't understand why the US Commerce Department continued to maintain that there are no substantial subsidies in the Netherlands and only minor ones in Germany.
In a statement designed to be noticed among members of the ''steel caucus,'' an influential congressional group, Mr. Carney complained, ''It is obvious by our government's actions that the Ruhr Valley steelworkers are better represented in Washington than steelworkers in the Ohio and Mon Valleys.''
This rankles the Europeans, who point out that they have agreed to end all steel subsidies by 1985. All current subsidies, they say, are related to restructing the industry and have been approved by the EC.
On the question of agricultural policy, European farmers are becoming more efficient and increasing their share of world markets. Their gains have come at the expense of the US farmer, who has produced another large crop, but has been hurt by the strong US dollar.
The US has brought before GATT so many agricultural charges against the Europeans, Thorn said, that it is straining the ability of the system to process them. By itself, he said, this is creating strains in the relationship.
In the high-technology communications business, European companies are also challenging US firms French companies are launching satellites and offering communications systems that are competitive with those offered by US firms.
Some European countries are faced with a 40 percent unemployment rate among people under the age of 25. Many Europeans view this unemployment rate as a greater security threat than the Warsaw Pact troops on their borders. Thus, the US President's sanctions on firms supplying equipment to the USSR-European gas pipeline has not been accepted well in Europe.
Against this background, GATT will hold a regularly scheduled meeting of ministers in Geneva November 24-26. Mr. Brock, as chief US trade negotiator, has been in contact with the Europeans, who have told him that progress cannot be made on resolving these important issues. One European government official said that a high-level EEC delegation had an unannounced meeting last week with Mr. Brock to try to convince him to moderate his expectations.
''Brock knows what's happening,'' the official said. ''The problem is in the White House. The whole alliance is being put into doubt over what is essentially a nuts-and-bolts problem.''