EC is more united on trade than Bonn summit suggested
The Bonn economic summit that ended Saturday got unfairly negative reviews in the press. Despite the pessimism coming from summit reports, the outlook for an early start for a new round of trade negotiations is good. That's the view of Willy De Clercq, the top trade official at the European Community (EC). On Wednesday President Reagan spoke to a session of the European Parliament, the EC's political arm.
The 10-member EC is the United States' second-largest trading partner after Japan. Last year the US exported $47 billion worth of goods to the EC while importing $57.4 billion. Members include Belgium, West Germany, France, Italy, Luxembourg, the Netherlands, Denmark, Ireland, Britain, and Greece.
On other matters Mr. De Clercq, the EC's commissioner for external relations, said the EC is likely to enjoy somewhat faster economic growth than expected, that it may take additional steps to slow Japanese exports, that it does not favor a complete overhaul of the world monetary system but rather ``pragmatic improvements,'' and sees greater responsiveness to European concerns coming from the US since James A. Baker III became treasury secretary.
The silver-haired, multilingual De Clercq said he was ``puzzled'' about negative impressions of the summit which he argued were ``not correct.'' At the 11th annual summit last week France blocked a US move to issue a unanimous call for an 1986 starting date for a new round of trade talks aimed at heading off protectionist pressures. Instead the seven Western industrialized nations at the summit issued a call for trade talks ``as soon as possible.''
Despite the disagreement on a starting date for talks under the Geneva-based General Agreement on Tariffs and Trade (GATT), ``We have now an agreement among us about all [that] is important'' in economic policy surrounding a trade round, he said.
Among the issues on which there is ``quite remarkable'' agreement are the need for the US to trim its budget deficit, the urgency of additional opening of Japanese markets to imports, and the need for European nations to foster stronger economic growth, he said.
The only possible block to a round would be the failure of industrialized nations to convince less developed countries (LDCs) to join the trade round. Some of the LDCs are hesitant about a new round, fearing a move to reduce barriers on services could let their infant service industries be trounced by massive Western service corporations.
But De Clercq noted that there is ``no longer a homogeneous bloc of LDCs against the new round. '' He is sending a top aide to Brazil, India, and Indonesia in the next few weeks to overcome resistance in those countries.
While the summit called for dismantling existing trade restrictions, De Clercq noted that the EC is ``examining'' tougher steps for dealing with Japanese imports. Compared to the US, the EC already deals strongly with Japan, but some members feel steps adopted so far have been thwarted.
``The [EC] has taken a tougher stand and . . . will stick to that stand,'' he said. However, in some sectors of the European Parliament and European industry ``there is a great deal of dissatifaction with the situation.''
In the past four years the EC trade deficit with Japan has declined slightly -- to $11 billion in 1984 -- while the US trade deficit with Japan tripled over the same period to $37 billion.
Now there is a greater consciousness of the unhappiness with Japan in the EC. It concerns the outcome of a 1982 agreement Japan signed with it to ``moderate'' exports of 10 products, including cars, television sets, stereo equipment, and machine tools. The moderation appears minor. For example, last year Japanese auto exports to the EC were 27 percent above the 1982 level.
Economic growth in EC member states is likely to be somewhat faster than the 2.4 to 2.5 percent average pace originally expected, De Clercq said. Growth could be ``a little bit closer'' to 3 percent, thus helping to take up a bit of the slack from the slowing US economy. De Clercq said he did not think the US economy is going into a recession.
He agreed with other Eurpean officials that, under Treasury secretary Baker, US economic policy has been more responsive to European concerns than in the past. The paragraph of the summit communiqu'e calling for improvements in the international monetary system aimed at making it more stable and effective ``would not have been written in that way two or three years ago,'' De Clercq said. Now there is a great consciousness of the links among trade, debt, and monetary problems, he said.