Clinton May Find Global Trade Accord Is Hard to Reach
AFTER clinching the North American Free Trade Agreement and hosting an unprecedented meeting of Asian Pacific leaders, President Clinton may find that the ultimate trade triumph - completion of a 116-nation global trade deal - is beyond his reach.
This week in Washington, Mr. Clinton and United States Trade Representative Mickey Kantor met with the European Community's (EC) top trade official, Sir Leon Brittan, to try to resolve their outstanding differences in areas ranging from farm subsidies to film distribution. After the meeting, both sides acknowledged that serious problems remain.
US-European agreement is essential for a successful completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), the global trade talks that have dragged on for more than seven years. Economists estimate that if GATT can break down the principal barriers to commerce, the world economy will expand by $270 billion over the next decade.
But time is running out. GATT officials have set Dec. 15 as the date by which negotiators must reach agreement. ``The US shares the commitment to complete the Uruguay Round in time,'' Sir Leon told reporters this week. ``I think we are making progress, but we still have a long way to go.''
The biggest obstacle is French opposition to reducing government supports for its farmers. Paris has demanded that a US-EC accord on cutting agricultural subsidies - the so-called Blair House agreement that was reached a year ago at Washington's official guest house - be re-worked.
But this week, the Clinton administration was steadfast in its position that the Blair House accord is not open to question.
``There will be no negotiating or reopening of the Blair House accord,'' Mr. Kantor said Tuesday. He had commented earlier that France had become isolated because of its position in world trade talks.
But a hopeful Sir Leon stressed, ``We are continuing discussions'' on ways to satisfy the French. Nonetheless, after two days of meetings in Washington, the EC trade commissioner left for Paris to deliver a disappointing message to the French government.
European analysts say that the 12-nation EC is practically paralyzed by continuing discord over political and monetary matters. Without a successful GATT, the EC will lose its cohesiveness in trade matters and its ability to deal effectively as an entity in the international arena.
As disputes delay completion of the Uruguay Round, international trade distortions mount, says Guy Pfeffermann, chief economist of the International Finance Corporation, the private-sector arm of the World Bank.
While developing countries have been reforming their economies and liberalizing trade, the recession-weary industrialized countries have become more strident and protectionist, he says. All of the leading economies are now running staggering deficits, he says, and there is little interest in ``giving ground on the GATT'' - which could mean greater competition and added unemployment in domestic markets.
GATT Director General Peter Sutherland implores citizens of the US, Europe, and Japan to be ``demanding of their leaders that they live up to their rhetoric [supporting GATT].''
He warns: ``We stand on the verge of a very different type of world, a world which will be more antagonistic in terms of trading policy and more divided in terms of the blocs that are waiting to turn inward rather than outward in the event of a failure of the [Uruguay] Round.''
While many observers criticize the Uruguay Round participants for lacking the political will to strike an accord, politicians on both sides of the Atlantic see a successful trade agreement ahead.
``There's no way to go back,'' says House majority leader Richard Gephardt (D) of Missouri, a trade maven. ``We are not going into a world where barriers are erected or increased or where trade doesn't intensify.''
Gijs de Vries, the Liberal Party's spokesman on trade policy in the European Parliament, is optimistic that a deal will be struck. France has been searching for its role in European affairs, he says. In the end, he predicts, Paris will not allow the GATT to be scuttled, because to do so would weaken the very tool it plans to use for carving out its influence.