Brinkmanship on GATT
NOTHING focuses attention like a deadline, even if, in the end, it may prove movable.
This week, Peter Southerland, director-general of the General Agreement on Tariffs and Trade, set Dec. 15 as the final cut-off date for the Uruguay round. It coincides with the expiration of fast-track approval for a GATT treaty in the United States. The pact is designed to reduce tariffs and other barriers to the trade of goods and services worldwide.
With deadlines, however, often comes the heat generated in trying to meet them. Hence the concern, especially in Washington, over German Chancellor Helmut Kohl's recent statements implying that Germany would support France's call to renegotiate a key US-European Community compromise. Reached in Washington in December, the ``Blair House'' compromise would cut EC-state agriculture subsidies by 21 percent over six years. Negotiators hoped that the accord, which did not completely please farmers on either side of the Atlantic, and angered France, would help put to rest an issue that had stalled the GATT talks for the better part of a year.
Mr. Kohl's statement has left other senior officials of the German government, especially those from the pro-free-trade Free Democratic Party, trying various forms of clarifications.
Kohl's statement may be most troubling for its nuisance factor; but that nuisance can't be underestimated. Foreign Minister Willy Claes of Belgium, which currently holds the EC's presidency, indicated on Tuesday that he may call on the EC to renegotiate the compromise. This injects uncertainty into the GATT talks beyond that already imposed by France, whose farm sector's political power belies its relatively small contribution to the French economy (about 2.4 percent of GDP).
Kohl may feel he owes France a favor; Germany's Bundesbank continues a high-interest-rate policy, which helps retard growth in other EC countries, including France.
Finishing the GATT round will be hard enough, given recessions or sluggish growth that affect the domestic politics of trade in the industrial countries. We hope neither Germany nor France wants to be seen as sinking a global free-trade agreement. New liberalization measures under GATT would dilute the exclusivity of regional trade blocs in the Americas and in Asia. These new provisions should reduce the risk of inter-bloc trade wars, something no nation can afford.